1 00:00:02,430 --> 00:00:05,260 Speaker 1: Bloomberg Audio Studios. Podcasts. 2 00:00:05,600 --> 00:00:06,019 Speaker 2: Radio. 3 00:00:06,410 --> 00:00:06,730 Speaker 3: News. 4 00:00:06,750 --> 00:00:08,010 Speaker 2: Bloomberg Money. 5 00:00:12,760 --> 00:00:15,700 Speaker 4: This is the Bloomberg Money Podcast. I'm Scarlett Fu with 6 00:00:15,720 --> 00:00:18,100 Speaker 4: Tom Keen. Join us each week for a smart look 7 00:00:18,140 --> 00:00:21,000 Speaker 4: at the forces shaping your financial life, powered by the 8 00:00:21,040 --> 00:00:25,300 Speaker 4: reporting of our global newsroom. We'll explore how people are earning, investing, 9 00:00:25,480 --> 00:00:28,729 Speaker 4: and building wealth. We're live Fridays at noon Eastern on 10 00:00:28,770 --> 00:00:32,370 Speaker 4: Bloomberg Television. Subscribe to the podcast wherever you listen, and 11 00:00:32,490 --> 00:00:35,430 Speaker 4: as always, on the Bloomberg Terminal and the Bloomberg Business app. 12 00:00:48,750 --> 00:00:52,490 Speaker 4: Good noon, everyone. Bloomberg Money, our show on personal finance, retirement, 13 00:00:52,630 --> 00:00:56,620 Speaker 4: and wealth management. I'm Scarlett Fu. Tom Keen is off today. 14 00:00:56,760 --> 00:01:00,140 Speaker 4: Coming up on the show today, Richard Haass, Centerview Partners 15 00:01:00,260 --> 00:01:03,750 Speaker 4: Senior Counselor and President Emeritus of the Council on Foreign Relations. 16 00:01:04,290 --> 00:01:06,590 Speaker 4: He makes the case that a strong foreign policy begins 17 00:01:06,630 --> 00:01:10,170 Speaker 4: with meeting domestic challenges like a swelling national debt or 18 00:01:10,250 --> 00:01:13,840 Speaker 4: a lopsided economy. Plus, we've got Ellen Zentner, Morgan Stanley 19 00:01:13,900 --> 00:01:17,419 Speaker 4: Wealth Management Chief Economic Strategist and Global Head of Thematic 20 00:01:17,480 --> 00:01:20,080 Speaker 4: and Macro Investing. She's done a ton of work on 21 00:01:20,120 --> 00:01:24,030 Speaker 4: longevity and the new long-term opportunities that that creates. But first, 22 00:01:24,190 --> 00:01:27,170 Speaker 4: let's get a snapshot of where things stand in the markets. 23 00:01:27,270 --> 00:01:29,850 Speaker 4: Stocks are rising on a combination of falling oil prices 24 00:01:30,310 --> 00:01:33,530 Speaker 4: and in pretty much as expected CPI report. For the Dow, 25 00:01:33,580 --> 00:01:35,080 Speaker 4: the S & P and the Nasdaq, the first gain 26 00:01:35,120 --> 00:01:37,560 Speaker 4: in five days. Notable that the S & P is 27 00:01:37,900 --> 00:01:41,320 Speaker 4: still about 1.6% shy of a record high set back 28 00:01:41,560 --> 00:01:45,080 Speaker 4: on Friday. August 13th. The VIX currently down right now 29 00:01:45,140 --> 00:01:47,620 Speaker 4: to about 15, but it did get above 18 yesterday. 30 00:01:47,880 --> 00:01:50,020 Speaker 4: Let's look at the cross asset board because yields are 31 00:01:50,120 --> 00:01:53,080 Speaker 4: backing off from multi-year highs. The 10-year yield now at 4.94%. 32 00:01:53,080 --> 00:01:58,090 Speaker 4: It almost touched 5% overnight. but has managed to back 33 00:01:58,130 --> 00:02:01,470 Speaker 4: away from that level. Dollar index, little change at this hour. 34 00:02:01,730 --> 00:02:06,450 Speaker 4: And oil prices retreating after yesterday topping 104 a barrel. 35 00:02:06,490 --> 00:02:07,110 Speaker 1: That is the U.S. 36 00:02:07,170 --> 00:02:11,010 Speaker 4: Benchmark WTI. It was a four standard deviation move, I'm told. 37 00:02:11,030 --> 00:02:13,630 Speaker 4: Tom Keen actually texted me and told me that. And 38 00:02:13,669 --> 00:02:16,389 Speaker 4: diesel prices, of course, you know, a product of oil 39 00:02:16,730 --> 00:02:18,770 Speaker 4: rising past $ 6 a gallon. We're going to get into 40 00:02:18,830 --> 00:02:21,950 Speaker 4: all of that shortly. So let's get into the conversation 41 00:02:21,990 --> 00:02:23,869 Speaker 4: right now, because joining us at the Money Desk this 42 00:02:23,950 --> 00:02:28,250 Speaker 4: afternoon is Bloomberg Money Managing Editor Nikki Waller. Bloomberg Intelligence 43 00:02:28,270 --> 00:02:33,160 Speaker 4: ETF Senior Analyst Eric Valtrunis, our Washington correspondent Tyler Kendall 44 00:02:33,280 --> 00:02:36,700 Speaker 4: in New York today, and Bloomberg Opinion columnist Alison Schrager, 45 00:02:36,720 --> 00:02:39,720 Speaker 4: who's also author of the upcoming book, Worth the Risk, 46 00:02:39,780 --> 00:02:42,019 Speaker 4: the seven myths that keep us from taking the chances 47 00:02:42,540 --> 00:02:44,800 Speaker 4: we need to take. So we got to start with 48 00:02:44,840 --> 00:02:47,859 Speaker 4: the big data point today, which was inflation. And Alison, 49 00:02:48,160 --> 00:02:52,240 Speaker 4: those numbers came out today at consumer prices, wholesale prices 50 00:02:52,260 --> 00:02:55,970 Speaker 4: came out Previously, they pretty much met or rose slightly 51 00:02:56,070 --> 00:02:58,870 Speaker 4: more than expected. So a rate hike feels, what, inevitable 52 00:02:58,889 --> 00:03:01,930 Speaker 4: at this point? Well, it was warm, but not hot. 53 00:03:02,790 --> 00:03:05,810 Speaker 5: And so the market's now pricing in maybe two rate 54 00:03:05,850 --> 00:03:08,739 Speaker 5: hikes later this year. I think the question is, though, 55 00:03:08,880 --> 00:03:11,950 Speaker 5: is that really going to be enough? I think what 56 00:03:11,970 --> 00:03:14,720 Speaker 5: we're starting to see is maybe sort of what we 57 00:03:14,750 --> 00:03:18,340 Speaker 5: don't want to realize, which is inflation might just sort 58 00:03:18,380 --> 00:03:22,000 Speaker 5: of be settling around 2.5%, 3%. And sort of this 59 00:03:22,040 --> 00:03:25,260 Speaker 5: nice deflationary pressure that we had is played out. And 60 00:03:25,560 --> 00:03:27,940 Speaker 5: if we really want to get inflation back to 2%, 61 00:03:27,940 --> 00:03:30,430 Speaker 5: it's going to really take more than tough talk and 62 00:03:30,450 --> 00:03:33,870 Speaker 5: a couple of rate hikes. And are we really willing to. 63 00:03:33,850 --> 00:03:35,670 Speaker 4: Do what it takes to decrease demand? 64 00:03:35,690 --> 00:03:37,730 Speaker 5: Because what we do is a lot of this inflation 65 00:03:37,770 --> 00:03:40,370 Speaker 5: pressure is from supply things like energy. So you're going 66 00:03:40,390 --> 00:03:42,680 Speaker 5: to have to really bring down demand based on where 67 00:03:42,690 --> 00:03:45,180 Speaker 5: it is now to get your hands around inflation. And 68 00:03:45,440 --> 00:03:47,760 Speaker 5: it's not clear we really have the appetite for that. Right. 69 00:03:47,800 --> 00:03:49,840 Speaker 4: That would require a series of rate hikes, not just 70 00:03:49,860 --> 00:03:53,770 Speaker 4: one 25 basis point hike. Potentially a recession. Or a recession. Nikki, 71 00:03:53,830 --> 00:03:56,630 Speaker 4: you've been looking into the data points of the inflation report. 72 00:03:56,690 --> 00:03:57,360 Speaker 4: What did you pick up? 73 00:03:57,950 --> 00:04:00,500 Speaker 6: So one thing to look at is not just what 74 00:04:00,540 --> 00:04:03,260 Speaker 6: happened last month, but what is going to happen in 75 00:04:03,280 --> 00:04:05,460 Speaker 6: the future. We saw the other big number that you 76 00:04:05,500 --> 00:04:09,000 Speaker 6: mentioned earlier, that diesel went up to $ 6 a gallon. 77 00:04:09,660 --> 00:04:13,990 Speaker 6: That shows up in the CPI. Fuel costs, obviously, a 78 00:04:14,040 --> 00:04:17,470 Speaker 6: huge part of that number. But the other thing that 79 00:04:17,550 --> 00:04:20,570 Speaker 6: we're going to see with all of those costs is 80 00:04:20,630 --> 00:04:23,810 Speaker 6: that Diesel is the price of getting your groceries to 81 00:04:23,830 --> 00:04:26,700 Speaker 6: the grocery store. So even more price hikes are in 82 00:04:26,740 --> 00:04:29,120 Speaker 6: store for things like the bananas and beans that you're 83 00:04:29,140 --> 00:04:30,979 Speaker 6: going to be buying at the grocery store right now. 84 00:04:31,360 --> 00:04:33,500 Speaker 7: Yeah, you know, when it comes to this oil spike 85 00:04:33,640 --> 00:04:36,469 Speaker 7: and the Iran situation, there's been this like back and forth. 86 00:04:37,260 --> 00:04:39,550 Speaker 7: with the president, you know, wanting to have peace talks 87 00:04:39,589 --> 00:04:41,909 Speaker 7: when oil goes too high because he's well aware he 88 00:04:41,950 --> 00:04:44,510 Speaker 7: does not want to have rates go up. It's horrible 89 00:04:44,529 --> 00:04:47,029 Speaker 7: for the economy. I think the stock market is kind 90 00:04:47,050 --> 00:04:50,650 Speaker 7: of a governing force over the whole apparatus. And so 91 00:04:50,690 --> 00:04:52,910 Speaker 7: the idea that oil goes up, stocks go down, there's 92 00:04:52,990 --> 00:04:55,950 Speaker 7: always reversal. So I think that's going to keep inflation 93 00:04:55,970 --> 00:04:57,750 Speaker 7: in check. And I'm going to take the under on 94 00:04:57,790 --> 00:04:59,589 Speaker 7: the rate hikes and go with zero. 95 00:04:59,370 --> 00:05:00,029 Speaker 1: Or even a cut. 96 00:05:00,130 --> 00:05:01,870 Speaker 4: You've been sticking to this point for a long time 97 00:05:01,910 --> 00:05:04,210 Speaker 4: because it all goes back to the president does not 98 00:05:04,250 --> 00:05:06,670 Speaker 4: want rate hikes. He wants rate cuts. And it's pretty straightforward. 99 00:05:07,310 --> 00:05:07,510 Speaker 3: Yeah. 100 00:05:07,570 --> 00:05:09,930 Speaker 7: I mean, he sat there and interviewed this guy and 101 00:05:09,950 --> 00:05:14,080 Speaker 7: I'm sure it came up. And I just think that's it. 102 00:05:14,339 --> 00:05:15,150 Speaker 7: People overthink it. 103 00:05:15,500 --> 00:05:18,240 Speaker 4: People overthink it. So, Tyler, you're here in New York. 104 00:05:18,320 --> 00:05:20,240 Speaker 4: But of course, there's a lot of action in Dallas 105 00:05:20,300 --> 00:05:22,320 Speaker 4: and you helped cover what was going on at the 106 00:05:22,420 --> 00:05:25,640 Speaker 4: first ever midterm convention held by the Republicans. Did they 107 00:05:25,680 --> 00:05:28,200 Speaker 4: bring up gas prices? Did they bring up affordability concerns? 108 00:05:28,910 --> 00:05:31,190 Speaker 8: It's interesting because how we did see it brought up 109 00:05:31,250 --> 00:05:33,710 Speaker 8: was through what is considered to be a rather unusual 110 00:05:33,770 --> 00:05:37,260 Speaker 8: proposal with this potential for a $ 5, 000 check to be 111 00:05:37,320 --> 00:05:40,520 Speaker 8: sent to Americans if Republicans end up winning both chambers 112 00:05:40,560 --> 00:05:42,219 Speaker 8: of Congress. We have to say that we did have 113 00:05:42,260 --> 00:05:45,450 Speaker 8: the NEC director, Kevin Hassett, on Bloomberg Television earlier today 114 00:05:45,870 --> 00:05:47,450 Speaker 8: who said that maybe this could be done through a 115 00:05:47,490 --> 00:05:50,770 Speaker 8: reconciliation package, which we should put context behind. That would 116 00:05:50,810 --> 00:05:53,250 Speaker 8: mean that Congress would have to get involved, even if 117 00:05:53,310 --> 00:05:55,680 Speaker 8: the president has previously floated that maybe he could do 118 00:05:55,710 --> 00:05:58,300 Speaker 8: it without their authority. I'll also point out we hear 119 00:05:58,339 --> 00:06:00,560 Speaker 8: a lot from the president about tariff revenues. 120 00:06:01,060 --> 00:06:02,580 Speaker 1: Our own analysts have crunched the numbers. 121 00:06:02,600 --> 00:06:05,580 Speaker 8: This could be a $ 1 trillion proposal when we talk 122 00:06:05,610 --> 00:06:08,270 Speaker 8: about all the concerns with the deficit, how difficult it 123 00:06:08,370 --> 00:06:12,570 Speaker 8: is to politically cut spending in Washington. But after those 124 00:06:12,630 --> 00:06:17,089 Speaker 8: tariff rebates, refunds from the Supreme Court case, I think 125 00:06:17,150 --> 00:06:20,240 Speaker 8: this year we're on track for somewhere close to $ 115 billion. 126 00:06:20,279 --> 00:06:23,919 Speaker 8: So we are much farther away from that trillion-dollar mark. 127 00:06:23,940 --> 00:06:25,180 Speaker 4: And so, Allison, I want to come to you because 128 00:06:25,200 --> 00:06:27,839 Speaker 4: that's an interesting point. The tariff revenue that came in, 129 00:06:27,900 --> 00:06:30,919 Speaker 4: I mean, that does help at least slow the growth 130 00:06:30,960 --> 00:06:32,130 Speaker 4: of our national debt, doesn't it? 131 00:06:32,790 --> 00:06:33,200 Speaker 1: It does. 132 00:06:33,430 --> 00:06:36,310 Speaker 5: I mean, that was one of the benefits, supposedly. I mean, 133 00:06:36,350 --> 00:06:37,610 Speaker 5: I don't think it's going to take care of our 134 00:06:37,630 --> 00:06:41,650 Speaker 5: debt problem. And when I try to be generous about tariffs, 135 00:06:41,670 --> 00:06:42,690 Speaker 5: as an economist, I hate them. 136 00:06:43,230 --> 00:06:45,950 Speaker 4: But, you know, it is a consumption tax, and I 137 00:06:46,010 --> 00:06:46,510 Speaker 4: like those. 138 00:06:47,060 --> 00:06:50,260 Speaker 5: But the problem is, I mean, I don't know how 139 00:06:50,300 --> 00:06:52,660 Speaker 5: realistic this $ 5, 000 check is, but I think we saw 140 00:06:52,700 --> 00:06:55,680 Speaker 5: during the pandemic that sending everyone a check is then inflationary. 141 00:06:55,900 --> 00:06:56,080 Speaker 2: Yeah. 142 00:06:56,240 --> 00:06:57,539 Speaker 4: And then increases the debt. 143 00:06:57,980 --> 00:07:00,520 Speaker 5: So, you know, you're sort of then in a bit 144 00:07:00,540 --> 00:07:03,560 Speaker 5: of a pickle that, you know, no tariff revenue, even 145 00:07:03,610 --> 00:07:06,260 Speaker 5: if we're tariffing 20 percent, is going to get you 146 00:07:06,320 --> 00:07:08,770 Speaker 5: out of, especially because that's another hit to prices. 147 00:07:09,130 --> 00:07:11,150 Speaker 4: You know, we had the consumer sentiment report coming out 148 00:07:11,170 --> 00:07:14,510 Speaker 4: of University of Michigan, and it shows sentiment, people feeling 149 00:07:14,670 --> 00:07:17,350 Speaker 4: lousier about the economy because of the rising gas prices, 150 00:07:17,370 --> 00:07:20,390 Speaker 4: the rising diesel prices, Nikki, that you mentioned. But it always... 151 00:07:20,750 --> 00:07:23,810 Speaker 4: splits along whether you're a Democrat or a Republican, doesn't it? 152 00:07:24,110 --> 00:07:24,730 Speaker 1: It does. 153 00:07:24,950 --> 00:07:27,680 Speaker 6: And I think we see much more positive views of 154 00:07:27,780 --> 00:07:30,240 Speaker 6: the economy on the red side of the House. At 155 00:07:30,280 --> 00:07:32,760 Speaker 6: the same time, I think it is deteriorating broadly as 156 00:07:33,860 --> 00:07:37,390 Speaker 6: people are experiencing the economy and not feeling. 157 00:07:37,150 --> 00:07:37,750 Speaker 5: Good about it. 158 00:07:38,010 --> 00:07:40,150 Speaker 4: Tyler, have the Democrats come up with any kind of 159 00:07:40,210 --> 00:07:43,450 Speaker 4: counter-programming to what the Republicans said at the midterm convention 160 00:07:43,510 --> 00:07:45,030 Speaker 4: to get their base fired up? 161 00:07:45,250 --> 00:07:47,010 Speaker 8: I love that you asked this because this is actually 162 00:07:47,270 --> 00:07:50,180 Speaker 8: every question that we asked every Democrat that joined us 163 00:07:50,220 --> 00:07:53,800 Speaker 8: this week on Bloomberg television. It's difficult at this moment because, 164 00:07:54,120 --> 00:07:57,420 Speaker 8: in one regard, Democrats have the ability to kind of 165 00:07:57,440 --> 00:08:00,300 Speaker 8: sit back and say that they don't control Congress at 166 00:08:00,340 --> 00:08:03,630 Speaker 8: this point, so they're going to let Republicans run with 167 00:08:03,830 --> 00:08:06,250 Speaker 8: what has been negative polling on this. I would point out, 168 00:08:06,730 --> 00:08:09,369 Speaker 8: In the consumer sentiment reading, we're seeing only 35 percent 169 00:08:09,410 --> 00:08:11,790 Speaker 8: of Republicans believe that the government is doing a good 170 00:08:11,890 --> 00:08:14,210 Speaker 8: job with the economy. That is at the lowest level 171 00:08:14,390 --> 00:08:17,050 Speaker 8: since President Trump took office. But Democrats face headwinds of 172 00:08:17,090 --> 00:08:18,790 Speaker 8: their own, including intraparty fighting. 173 00:08:19,090 --> 00:08:20,810 Speaker 4: But you look at the stock market, Eric, and I 174 00:08:20,850 --> 00:08:23,310 Speaker 4: pointed out it's still about 1.6 percent shy of its 175 00:08:23,370 --> 00:08:26,150 Speaker 4: record high. I mean, the stock market keeps chugging along 176 00:08:26,210 --> 00:08:28,720 Speaker 4: because of corporate profits. And I know you've been making 177 00:08:28,760 --> 00:08:30,660 Speaker 4: the case for a while now that the stock market 178 00:08:30,720 --> 00:08:33,900 Speaker 4: is America's retirement vehicle and policymakers can't let it fail. 179 00:08:34,370 --> 00:08:37,070 Speaker 7: Yeah, the political pressure is just it's going to get grow. 180 00:08:37,130 --> 00:08:39,760 Speaker 7: It's going to grow and grow, especially as Alison said, 181 00:08:40,080 --> 00:08:42,400 Speaker 7: you know, as Lynn Alden says, nothing stops this train. 182 00:08:42,460 --> 00:08:45,060 Speaker 7: Both parties are going to spend. There is no nobody's 183 00:08:45,080 --> 00:08:47,370 Speaker 7: going to who wants to tax or cut benefits. 184 00:08:47,450 --> 00:08:49,030 Speaker 2: It's just politically unpopular. 185 00:08:49,070 --> 00:08:50,590 Speaker 1: So the more the stock. 186 00:08:50,390 --> 00:08:53,650 Speaker 7: Market becomes the retirement vehicle for Americans. and creates the 187 00:08:53,690 --> 00:08:56,600 Speaker 7: wealth effect for the top spenders, it's going to be 188 00:08:56,620 --> 00:08:57,959 Speaker 7: a problem if it goes down too much. 189 00:08:58,000 --> 00:08:58,560 Speaker 1: And I think. 190 00:08:58,720 --> 00:09:01,420 Speaker 7: Investors sense this, because the Fed and the Treasury has 191 00:09:01,440 --> 00:09:04,660 Speaker 7: stepped in in times past. That's why VU and CHIL exist. 192 00:09:04,700 --> 00:09:06,980 Speaker 7: You just buy VU, and you don't do anything, and 193 00:09:07,020 --> 00:09:09,450 Speaker 7: it tends to work out. So through all these headlines, 194 00:09:09,970 --> 00:09:12,869 Speaker 7: all year, past 18 months, VU has just taken in 195 00:09:12,910 --> 00:09:14,709 Speaker 7: about a billion a day, as well as a bunch 196 00:09:14,730 --> 00:09:16,069 Speaker 7: of other ETFs that do the same thing. 197 00:09:16,130 --> 00:09:19,410 Speaker 5: And that also puts a ceiling on how much they 198 00:09:19,429 --> 00:09:21,410 Speaker 5: can increase rates, because If they increase rates, that lowers 199 00:09:21,450 --> 00:09:23,050 Speaker 5: stocks because that's the discount rate. 200 00:09:23,490 --> 00:09:25,830 Speaker 4: And if they're taking out everyone's retirement. 201 00:09:25,320 --> 00:09:26,860 Speaker 5: Wealth, yeah. 202 00:09:27,100 --> 00:09:29,860 Speaker 6: And when you look at retirement wealth, it is higher 203 00:09:29,920 --> 00:09:32,880 Speaker 6: than it's ever been. Americans have an average of, I think, 204 00:09:32,880 --> 00:09:37,140 Speaker 6: $ 151, 000 in their 401ks. And we just reported from Fidelity 205 00:09:37,320 --> 00:09:41,780 Speaker 6: last week that the number of 401k millionaires is higher 206 00:09:41,860 --> 00:09:42,760 Speaker 6: than ever before. 207 00:09:43,320 --> 00:09:45,000 Speaker 4: It's a matter of whether people do anything with it 208 00:09:45,040 --> 00:09:48,340 Speaker 4: because it's on paper, right? It's not actualized just yet, 209 00:09:48,360 --> 00:09:52,390 Speaker 4: but it creates that wealth effect. So put this all together, Eric, 210 00:09:52,410 --> 00:09:55,090 Speaker 4: because you talk about voo and chill. You wrote the 211 00:09:55,110 --> 00:09:57,350 Speaker 4: book on Vanguard and its founder, Jack Bogle. I've heard 212 00:09:57,370 --> 00:09:59,690 Speaker 4: you use Vanguard as both an adjective and a verb. 213 00:10:00,120 --> 00:10:03,620 Speaker 4: the first person to do that. Why does Vanguard matter 214 00:10:03,679 --> 00:10:05,720 Speaker 4: so much to how we save and how we invest? 215 00:10:06,340 --> 00:10:10,000 Speaker 7: Yeah, because they made everything basically free. I mean, they 216 00:10:10,040 --> 00:10:13,800 Speaker 7: created what's an investor utopia right now. You can basically just, 217 00:10:13,900 --> 00:10:14,380 Speaker 7: you don't have to. 218 00:10:14,360 --> 00:10:14,840 Speaker 1: Get out of bed. 219 00:10:14,860 --> 00:10:17,300 Speaker 4: You could get, you just pick up your phone, type. 220 00:10:17,110 --> 00:10:19,210 Speaker 7: A few things and own anything under the sun for 221 00:10:19,250 --> 00:10:22,660 Speaker 7: almost no fee. And if Bogle hadn't set up Vanguard 222 00:10:22,679 --> 00:10:26,220 Speaker 7: to be a mutually owned company that lowered fees naturally 223 00:10:26,340 --> 00:10:29,520 Speaker 7: over 50 years, none of this would exist. There would 224 00:10:29,570 --> 00:10:33,050 Speaker 7: really be no economic incentive to go this low. But honestly, 225 00:10:33,090 --> 00:10:34,630 Speaker 7: he did it. We call it the Vanguard effect or 226 00:10:34,650 --> 00:10:38,310 Speaker 7: the Bogle effect. And it's now hitting active. Even active 227 00:10:38,330 --> 00:10:41,030 Speaker 7: is now getting cheap. So investors are in a very 228 00:10:41,150 --> 00:10:43,329 Speaker 7: good period right now and also. 229 00:10:43,110 --> 00:10:44,229 Speaker 1: Think that's why they don't leave. 230 00:10:44,290 --> 00:10:46,610 Speaker 7: It's not just the Fed put but they feel like 231 00:10:46,630 --> 00:10:48,590 Speaker 7: they found a product they can get married to. They 232 00:10:48,630 --> 00:10:51,380 Speaker 7: don't need to date anymore with different active managers. They 233 00:10:51,420 --> 00:10:53,360 Speaker 7: just buy Vu, and they're off the market. 234 00:10:54,059 --> 00:10:56,120 Speaker 4: Vu and chill, or Vu and retire at this point. 235 00:10:56,420 --> 00:10:58,440 Speaker 4: All right, thank you so much to our roundtable, Bloomberg 236 00:10:58,460 --> 00:11:02,079 Speaker 4: Money Managing Editor Nikki Waller, Bloomberg Intelligence ETF Senior Analyst 237 00:11:02,120 --> 00:11:06,110 Speaker 4: Eric Bautrunas, Bloomberg Opinion Columnist Allison Schrager, and Bloomberg Washington 238 00:11:06,130 --> 00:11:08,910 Speaker 4: Correspondent Tyler Kendall in New York today. 239 00:11:10,730 --> 00:11:11,930 Speaker 1: You're listening to Bloomberg Money. 240 00:11:12,150 --> 00:11:13,890 Speaker 4: Stay with us for more to come after this. 241 00:11:19,840 --> 00:11:22,140 Speaker 1: Welcome back to Bloomberg Money. I'm Scarlett Fu. 242 00:11:22,200 --> 00:11:25,819 Speaker 4: Joining us now is Richard Haass, Centerview Partners Senior Counselor 243 00:11:25,920 --> 00:11:28,630 Speaker 4: and President Emeritus at the Council on Foreign Relations. And 244 00:11:28,650 --> 00:11:30,429 Speaker 4: of course, we're pleased to have you here on this 245 00:11:30,450 --> 00:11:34,070 Speaker 4: 25th anniversary of 9-11. We're going to talk about foreign policy, 246 00:11:34,090 --> 00:11:37,470 Speaker 4: but more importantly, we're going to talk about domestic policy, too, 247 00:11:37,570 --> 00:11:40,080 Speaker 4: and the health of our domestic institutions. One of your 248 00:11:40,120 --> 00:11:43,400 Speaker 4: thesis is that foreign policy begins at home. American power 249 00:11:43,460 --> 00:11:46,940 Speaker 4: is not just nuclear weapons or aircraft carriers. It rests 250 00:11:47,100 --> 00:11:50,300 Speaker 4: on the economic, political and social strength of the U.S. 251 00:11:50,340 --> 00:11:50,620 Speaker 2: Itself. 252 00:11:50,800 --> 00:11:53,470 Speaker 4: So my question to you, Richard, is how strong are 253 00:11:53,500 --> 00:11:56,710 Speaker 4: these foundations of American power in September 2026? 254 00:11:56,710 --> 00:12:00,050 Speaker 2: Short answer, Scarlett, is they're not as strong as they were. 255 00:12:00,490 --> 00:12:02,309 Speaker 2: And the short answer is there's not they're not as 256 00:12:02,350 --> 00:12:05,160 Speaker 2: strong as they need to be. People don't have the 257 00:12:05,179 --> 00:12:07,760 Speaker 2: same confidence us. They don't see us the same way 258 00:12:08,059 --> 00:12:14,330 Speaker 2: politically whether it's January 6th or other sorts of polarization Economically, 259 00:12:14,370 --> 00:12:17,010 Speaker 2: they look at the scale of our debt and basically 260 00:12:17,070 --> 00:12:21,250 Speaker 2: say are you Americans? Willing and able to deal with 261 00:12:21,290 --> 00:12:24,870 Speaker 2: your obligations your responsibilities because you're not just any other country. 262 00:12:25,230 --> 00:12:28,520 Speaker 2: We are dependent Upon you they look at frictions in 263 00:12:28,580 --> 00:12:31,599 Speaker 2: our society. So yeah, I think there's a There's unfortunately 264 00:12:31,660 --> 00:12:33,980 Speaker 2: real reason to be concerned about, if you will, the 265 00:12:34,020 --> 00:12:34,700 Speaker 2: state of the country. 266 00:12:35,120 --> 00:12:38,060 Speaker 4: And it creates a permission structure for other countries to 267 00:12:38,100 --> 00:12:40,599 Speaker 4: do something similar for other actors to kind of follow 268 00:12:40,620 --> 00:12:41,300 Speaker 4: in our footsteps. 269 00:12:42,000 --> 00:12:43,800 Speaker 2: Well, we're certainly not setting an example a lot of 270 00:12:43,820 --> 00:12:45,490 Speaker 2: them would want to emulate. That was the whole idea 271 00:12:45,510 --> 00:12:48,829 Speaker 2: of soft power. that people would see the vibrancy of 272 00:12:48,890 --> 00:12:52,240 Speaker 2: our economic system, our political system, our society, and they'd say, hey, 273 00:12:52,700 --> 00:12:54,520 Speaker 2: we want to be more like them. I don't think 274 00:12:54,559 --> 00:12:57,060 Speaker 2: a whole lot of other countries are doing that. Plus, 275 00:12:57,500 --> 00:13:00,280 Speaker 2: we're not leaning on them in the same way. I mean, 276 00:13:00,300 --> 00:13:02,590 Speaker 2: we're not going to push them, shall we say. To 277 00:13:02,610 --> 00:13:05,030 Speaker 2: the contrary, you had these elections in Germany the other day. 278 00:13:05,630 --> 00:13:10,000 Speaker 2: Instead of expressing concerns, about our right wing pro-Russia and 279 00:13:10,070 --> 00:13:13,030 Speaker 2: sympathetic to the Nazi past party, you have the president 280 00:13:13,090 --> 00:13:15,589 Speaker 2: and Elon Musk congratulating them. So yeah, we're in a 281 00:13:15,630 --> 00:13:16,350 Speaker 2: very different place. 282 00:13:16,910 --> 00:13:18,290 Speaker 1: So the president has pulled the U.S. 283 00:13:18,340 --> 00:13:21,600 Speaker 4: Out of all kinds of multilateral organizations and agreements. You've 284 00:13:21,620 --> 00:13:24,500 Speaker 4: made the argument that this kind of retreat would ultimately 285 00:13:24,559 --> 00:13:27,140 Speaker 4: make Americans feel less secure and less prosperous. And we 286 00:13:27,160 --> 00:13:31,280 Speaker 4: see this reflected in lots of consumer sentiment surveys. Explain 287 00:13:31,300 --> 00:13:34,209 Speaker 4: the connection here. Why should an American who is struggling 288 00:13:34,270 --> 00:13:38,830 Speaker 4: with housing, with health care, with retirement care whether Washington 289 00:13:38,870 --> 00:13:40,590 Speaker 4: continues to underwrite global order? 290 00:13:41,370 --> 00:13:44,390 Speaker 2: Because what happens there doesn't stay there. Here we are today, 291 00:13:44,390 --> 00:13:47,640 Speaker 2: 25 years after 9-11. What was one of the great 292 00:13:47,679 --> 00:13:52,100 Speaker 2: lessons of 9-11? That stuff happening in places like Afghanistan 293 00:13:52,660 --> 00:13:56,100 Speaker 2: could travel here. You had Saudis getting trained by terrorists 294 00:13:57,179 --> 00:14:01,260 Speaker 2: in Afghanistan, coming over here, killing nearly 3,000 people in 295 00:14:01,300 --> 00:14:04,679 Speaker 2: a single day. What does that tell us? The idea 296 00:14:04,700 --> 00:14:07,910 Speaker 2: of a border. We have to rethink it. Well, more recently, COVID. 297 00:14:08,240 --> 00:14:09,939 Speaker 2: What began, whether it was in a market or a 298 00:14:09,980 --> 00:14:13,660 Speaker 2: laboratory in Wuhan, China, again came here and killed so 299 00:14:13,700 --> 00:14:17,560 Speaker 2: many Americans. Look at trade. All the Americans who lost 300 00:14:17,580 --> 00:14:20,510 Speaker 2: their jobs because of trade or new technology, or in 301 00:14:20,530 --> 00:14:23,310 Speaker 2: some cases have gotten jobs because of the ability to 302 00:14:23,490 --> 00:14:27,010 Speaker 2: export to others. So the idea of foreign policy being foreign, 303 00:14:27,410 --> 00:14:29,290 Speaker 2: we really need a new template for that. We have 304 00:14:29,310 --> 00:14:32,240 Speaker 2: to understand that what happens here, your first question, affects 305 00:14:32,260 --> 00:14:35,800 Speaker 2: what goes on elsewhere, but also the other way. These 306 00:14:35,840 --> 00:14:38,660 Speaker 2: two oceans, the Atlantic and the Pacific, whatever else they are, 307 00:14:38,680 --> 00:14:41,910 Speaker 2: they're not moats. We are affected by what goes on elsewhere. 308 00:14:42,090 --> 00:14:45,790 Speaker 4: Let's talk about fiscal policy because today, collectively, we're seeing 309 00:14:45,810 --> 00:14:49,330 Speaker 4: the bond market and economists sending warning signals about the 310 00:14:49,390 --> 00:14:52,720 Speaker 4: national debt, more than $ 40 trillion. How high does that 311 00:14:52,720 --> 00:14:56,479 Speaker 4: $ 40 trillion of national public debt rank as a national 312 00:14:56,500 --> 00:14:57,140 Speaker 4: security issue? 313 00:14:57,650 --> 00:14:59,770 Speaker 2: It is a national security issue because the rest of 314 00:14:59,810 --> 00:15:03,310 Speaker 2: the world loses confidence in our ability to manage our economy. 315 00:15:03,750 --> 00:15:06,970 Speaker 2: They'll move away from the dollar. They'll stop financing the debt. 316 00:15:07,350 --> 00:15:09,890 Speaker 2: We will then have to take all sorts of economic measures, 317 00:15:10,210 --> 00:15:13,820 Speaker 2: for example, raising rates, not to cool an overheated economy, 318 00:15:14,100 --> 00:15:18,580 Speaker 2: but simply to attract the financing that we want and need. 319 00:15:18,840 --> 00:15:21,070 Speaker 2: And then we're not going to have that money. available 320 00:15:21,090 --> 00:15:23,250 Speaker 2: for other things, whether it's to build better schools or 321 00:15:23,290 --> 00:15:25,910 Speaker 2: build bridges or be nice to have some high-speed rail 322 00:15:25,970 --> 00:15:29,340 Speaker 2: in this country. And we could go down the list. 323 00:15:29,360 --> 00:15:30,900 Speaker 2: There's a million things we won't be able to do. 324 00:15:30,920 --> 00:15:32,960 Speaker 2: We've already kind of gotten close to that point. The 325 00:15:33,020 --> 00:15:36,580 Speaker 2: service on the debt, essentially paying the interest on our debt, 326 00:15:36,840 --> 00:15:39,650 Speaker 2: is now greater than what we spend on defense. That 327 00:15:39,810 --> 00:15:42,680 Speaker 2: is crazy. This is money going down the drain. We 328 00:15:42,720 --> 00:15:46,080 Speaker 2: want to spend money, the budget, on productive things. We 329 00:15:46,120 --> 00:15:48,500 Speaker 2: want to invest in ourselves and our own future. We 330 00:15:48,520 --> 00:15:51,360 Speaker 2: don't want to simply pay off our past profligacy, and 331 00:15:51,400 --> 00:15:52,090 Speaker 2: that is what we're doing. 332 00:15:52,800 --> 00:15:56,100 Speaker 4: Well, it brings to mind this erosion of trust. And 333 00:15:56,140 --> 00:16:00,300 Speaker 4: it's not just foreign countries' trust in America. It's also 334 00:16:00,360 --> 00:16:02,160 Speaker 4: our own trust in ourselves. There's a new poll from 335 00:16:02,180 --> 00:16:06,740 Speaker 4: APNORC that shows more Americans have stopped believing in the government. 336 00:16:07,020 --> 00:16:10,150 Speaker 4: Public trust in federal government information about inflation and cost 337 00:16:10,190 --> 00:16:13,830 Speaker 4: of living is now 18 percent from 26 percent in 2024. 338 00:16:13,830 --> 00:16:16,870 Speaker 4: Trust in information about the labor market down to 15 percent. 339 00:16:17,190 --> 00:16:20,930 Speaker 4: Trust in elections and politics down to 13 percent. Can 340 00:16:21,070 --> 00:16:25,310 Speaker 4: government or our institutions rebuild or repair that trust, Richard? 341 00:16:25,590 --> 00:16:28,340 Speaker 2: First of all, it's really depressing to hear statistics like that. 342 00:16:28,700 --> 00:16:33,420 Speaker 2: That's kind of what you get when politicians continually tear 343 00:16:33,460 --> 00:16:37,380 Speaker 2: down the government, raise questions about the legitimacy of our elections. 344 00:16:37,780 --> 00:16:39,760 Speaker 2: When we looked at it, take the 2020 elections, we 345 00:16:39,780 --> 00:16:42,340 Speaker 2: looked at it. It's 60 court cases. There was nothing there. 346 00:16:42,950 --> 00:16:45,410 Speaker 2: when you have people talking about the deep state as 347 00:16:45,450 --> 00:16:47,990 Speaker 2: though the government, the tens of millions of Americans who 348 00:16:48,010 --> 00:16:50,990 Speaker 2: work for the government, are somehow something else. No, they're us. 349 00:16:51,390 --> 00:16:55,510 Speaker 2: They're our wives, our husbands, our children, our neighbors. And 350 00:16:55,550 --> 00:16:57,890 Speaker 2: we want the best and brightest to go into government. 351 00:16:58,050 --> 00:17:00,860 Speaker 2: We need to trust our country, our government, because we're 352 00:17:00,890 --> 00:17:04,560 Speaker 2: so affected by its decisions, what it does and doesn't do. Look, 353 00:17:05,060 --> 00:17:06,280 Speaker 2: it's going to take a few things. It's going to 354 00:17:06,320 --> 00:17:09,490 Speaker 2: take leadership that stops tearing us down. That would help 355 00:17:10,130 --> 00:17:12,790 Speaker 2: from the top, but also from the bottom. We need to, 356 00:17:12,830 --> 00:17:14,970 Speaker 2: for example, have civics taught in our schools. You should 357 00:17:15,010 --> 00:17:18,030 Speaker 2: not be able to get a high school or college degree, 358 00:17:18,109 --> 00:17:21,450 Speaker 2: I would argue, without understanding the basics of democracy, the 359 00:17:21,490 --> 00:17:24,680 Speaker 2: relationships between this country and its individual citizens, your rights, 360 00:17:25,119 --> 00:17:27,700 Speaker 2: but also your obligations. What do you owe this country? 361 00:17:27,720 --> 00:17:30,219 Speaker 2: We want more people to do public service, whether it's 362 00:17:30,300 --> 00:17:34,030 Speaker 2: military or civilian, international or domestic. You have to rebuild 363 00:17:34,050 --> 00:17:36,869 Speaker 2: the bonds that made this country so special. So when 364 00:17:36,890 --> 00:17:40,190 Speaker 2: de Tocqueville came over here, what, 200, 150 years ago, 365 00:17:40,530 --> 00:17:42,810 Speaker 2: he looked at America and he said, wow, this is 366 00:17:42,869 --> 00:17:46,109 Speaker 2: a country that works together, that's unified. Again, here we are, 9-11. 367 00:17:46,670 --> 00:17:47,430 Speaker 2: What happened after 9-11? 368 00:17:48,410 --> 00:17:48,730 Speaker 3: Unity. 369 00:17:49,040 --> 00:17:51,800 Speaker 2: We came together. What did President Bush do? He went 370 00:17:51,840 --> 00:17:55,119 Speaker 2: to the mosque in Washington and said, we are all Americans. 371 00:17:55,160 --> 00:17:58,380 Speaker 2: Whatever our religion, however we dress, we have to be 372 00:17:58,420 --> 00:18:00,360 Speaker 2: there for one another. We need to hear a little 373 00:18:00,400 --> 00:18:00,940 Speaker 2: bit more of that. 374 00:18:01,140 --> 00:18:01,340 Speaker 3: All right. 375 00:18:01,359 --> 00:18:03,920 Speaker 4: A fired up Richard Haass here on the 25th anniversary 376 00:18:03,940 --> 00:18:05,770 Speaker 4: of 9-11. You're going to stick with us right now. 377 00:18:06,640 --> 00:18:08,850 Speaker 4: Later on, according to that survey, more and more young 378 00:18:08,890 --> 00:18:12,010 Speaker 4: people are also looking at other ways of building wealth. 379 00:18:12,030 --> 00:18:15,669 Speaker 4: They're considering things like sports gambling and prediction markets as 380 00:18:15,730 --> 00:18:17,470 Speaker 4: a form of investing. That's something we'll get into a 381 00:18:17,470 --> 00:18:24,619 Speaker 4: little bit later on. This is Bloomberg Money. You're listening 382 00:18:24,660 --> 00:18:26,620 Speaker 4: to Bloomberg Money. Stay with us for more to come 383 00:18:26,640 --> 00:18:27,340 Speaker 4: after this. 384 00:18:34,859 --> 00:18:36,420 Speaker 1: This is Bloomberg Money. I'm Scarlett Fu. 385 00:18:36,460 --> 00:18:39,520 Speaker 4: Back with us is Richard Haass, Senior Counselor at Centerview 386 00:18:39,600 --> 00:18:43,960 Speaker 4: Partners and formerly with the Council of Foreign Relations. Bloomberg 387 00:18:43,980 --> 00:18:46,760 Speaker 4: Money is our show on personal finance, retirement, wealth management. 388 00:18:47,080 --> 00:18:49,790 Speaker 4: What's your personal strategy for investing, for saving? 389 00:18:50,390 --> 00:18:52,369 Speaker 2: Look, I'm not smart enough to do market timing, so 390 00:18:52,410 --> 00:18:55,330 Speaker 2: I tend to invest for the long term. I'm also 391 00:18:55,390 --> 00:18:59,940 Speaker 2: heavily diversified. I'm uneasy right now. I'm a pessimist by nature, 392 00:19:00,040 --> 00:19:02,600 Speaker 2: as you know, from having had me on various shows. 393 00:19:03,220 --> 00:19:05,000 Speaker 2: And there are times in life, I think, to make money, 394 00:19:05,200 --> 00:19:07,230 Speaker 2: and there's also times in life not to lose money. 395 00:19:07,630 --> 00:19:09,770 Speaker 2: So I would think I'm increasingly in the latter camp. 396 00:19:10,070 --> 00:19:12,330 Speaker 2: So I'm still pretty invested. I'm also not a kid anymore. 397 00:19:12,410 --> 00:19:14,230 Speaker 4: Because of where you are in your investing career or 398 00:19:14,250 --> 00:19:16,270 Speaker 4: because of where we are geopolitically? 399 00:19:16,650 --> 00:19:18,210 Speaker 2: The idea that we're going to get through the next 400 00:19:18,280 --> 00:19:20,359 Speaker 2: couple of years without some type of a crisis. We 401 00:19:20,380 --> 00:19:22,180 Speaker 2: haven't had a recession in a decade and a half. 402 00:19:22,580 --> 00:19:25,510 Speaker 2: We talked about the $ 40 trillion debt. You have to 403 00:19:25,550 --> 00:19:28,030 Speaker 2: be a real optimist to think that something's not going 404 00:19:28,070 --> 00:19:30,790 Speaker 2: to happen. Energy infrastructure has not, for the most part, 405 00:19:30,810 --> 00:19:33,190 Speaker 2: been destroyed in this war. What happens if that were 406 00:19:33,300 --> 00:19:36,840 Speaker 2: to change? And then you would have $ 200 a barrel. So, 407 00:19:36,859 --> 00:19:39,179 Speaker 2: you know, when you get older, you've got to have 408 00:19:39,220 --> 00:19:42,720 Speaker 2: a more conservative investing posture. So I've dialed down gradually. 409 00:19:43,070 --> 00:19:44,730 Speaker 2: Not flipped the switch, but dialed down. 410 00:19:45,070 --> 00:19:45,330 Speaker 9: All right. 411 00:19:45,390 --> 00:19:46,609 Speaker 4: Before I let you go, I've always wanted to ask 412 00:19:46,650 --> 00:19:50,010 Speaker 4: you about your connection to the Big Lebowski. Because the dude... 413 00:19:49,950 --> 00:19:53,510 Speaker 4: quoted President George H.W. Bush and his comment on how 414 00:19:53,550 --> 00:19:56,129 Speaker 4: this will not stand, this aggression, in the context of 415 00:19:56,170 --> 00:20:00,260 Speaker 4: a rug dispute. You played a key role in shaping H.W. 416 00:20:00,300 --> 00:20:03,420 Speaker 4: Bush's policy response that led to that famous line, didn't you? 417 00:20:05,100 --> 00:20:08,220 Speaker 2: Well, this is taking an interesting turn. Yeah, I met 418 00:20:08,260 --> 00:20:11,109 Speaker 2: the president on the South Lawn that day. This was, 419 00:20:11,150 --> 00:20:13,359 Speaker 2: I think, it was the Sunday of the war. He 420 00:20:13,380 --> 00:20:17,020 Speaker 2: was coming back from Camp David. I handed him a message, 421 00:20:17,420 --> 00:20:19,040 Speaker 2: but it was his line. It was not from me. 422 00:20:19,460 --> 00:20:21,199 Speaker 2: And he basically said, what have we heard from all 423 00:20:21,220 --> 00:20:23,600 Speaker 2: of our allies? What happened? Has Saddam made any moves out? 424 00:20:23,820 --> 00:20:26,540 Speaker 2: And he got really angry when I told him what 425 00:20:26,580 --> 00:20:29,260 Speaker 2: was happening and what was not happening. And then that 426 00:20:29,320 --> 00:20:32,660 Speaker 2: was him. That was from his heart. This aggression against 427 00:20:32,720 --> 00:20:35,260 Speaker 2: Kuwait will not stand. And it really is and was 428 00:20:35,320 --> 00:20:38,590 Speaker 2: the signature line of his presidency. I remember Colin Powell, 429 00:20:38,650 --> 00:20:40,130 Speaker 2: who was then the chairman of the Joint Chiefs of Staff, 430 00:20:40,350 --> 00:20:43,010 Speaker 2: got really furious with me, saying, you put the president 431 00:20:43,070 --> 00:20:45,179 Speaker 2: up to saying that. We haven't made this decision yet. 432 00:20:46,030 --> 00:20:47,290 Speaker 2: I said, take it to the boss. 433 00:20:47,650 --> 00:20:49,930 Speaker 4: It wasn't you. It was him. But it was your 434 00:20:49,950 --> 00:20:53,660 Speaker 4: policy suggestion, I suppose, that pushed him in that direction. Richard, 435 00:20:54,020 --> 00:20:56,260 Speaker 4: always appreciate your time. Thank you so much. Richard Haass, 436 00:20:56,820 --> 00:21:00,550 Speaker 4: formerly with the Council of Foreign Relations. Now, Social Security 437 00:21:00,790 --> 00:21:03,170 Speaker 4: will start running out earlier than expected. These are according 438 00:21:03,210 --> 00:21:06,350 Speaker 4: to the latest projections. And some fiscal hawks say that's 439 00:21:06,390 --> 00:21:08,840 Speaker 4: a good thing because the benefits are too high and 440 00:21:08,859 --> 00:21:10,639 Speaker 4: they're not meant to be the sole source of income 441 00:21:10,680 --> 00:21:15,020 Speaker 4: for a middle class retirement. Bloomberg Opinion's Catherine Ann Edwards disagrees. 442 00:21:15,580 --> 00:21:18,660 Speaker 4: She writes, rather than seeing Social Security as a reflection 443 00:21:18,700 --> 00:21:21,969 Speaker 4: of 1935's problems, the goal should be to see the 444 00:21:22,010 --> 00:21:23,629 Speaker 4: program as an answer to 2026's problems. 445 00:21:25,580 --> 00:21:27,800 Speaker 1: Catherine joins us now to discuss. 446 00:21:28,220 --> 00:21:32,940 Speaker 4: So, Catherine, Social Security was created in 1935. The country 447 00:21:32,960 --> 00:21:35,590 Speaker 4: was in a very different place with very different demographics. 448 00:21:35,670 --> 00:21:39,310 Speaker 4: There have been changes instituted along the way, but not enough. So, 449 00:21:39,390 --> 00:21:40,820 Speaker 4: is it just time to make a change to it? 450 00:21:41,310 --> 00:21:42,990 Speaker 10: Well, it's absolutely time to make a change to it 451 00:21:43,030 --> 00:21:45,470 Speaker 10: because the trust fund will be depleted in the fourth 452 00:21:45,520 --> 00:21:48,679 Speaker 10: quarter of 2032. What I argue is not to treat 453 00:21:48,820 --> 00:21:53,540 Speaker 10: this upcoming trust fund depletion as an accounting exercise. We 454 00:21:53,600 --> 00:21:56,440 Speaker 10: know how to make a, you know, a budget balance, 455 00:21:56,859 --> 00:21:59,340 Speaker 10: at least when it comes to Social Security. But that's 456 00:21:59,380 --> 00:22:01,909 Speaker 10: missing the overall point of the program, to have a 457 00:22:01,940 --> 00:22:05,710 Speaker 10: compact between citizens and their government, to provide economic security 458 00:22:05,770 --> 00:22:08,850 Speaker 10: at some minimum level going forward. And in 1935, one 459 00:22:09,270 --> 00:22:11,970 Speaker 10: of the most pressing issues was the desperate poverty of 460 00:22:12,050 --> 00:22:14,550 Speaker 10: elderly Americans, the number who were showing up to work 461 00:22:14,590 --> 00:22:17,550 Speaker 10: lines because they simply did not have anything else. Social 462 00:22:17,570 --> 00:22:20,490 Speaker 10: Security solved that problem. It did an outstanding job. But 463 00:22:20,520 --> 00:22:22,960 Speaker 10: that doesn't mean that the answer in 2026 is to 464 00:22:23,000 --> 00:22:25,920 Speaker 10: therefore cut and say mission accomplished. We should think about 465 00:22:25,960 --> 00:22:28,840 Speaker 10: this very successful tool that the federal government has and 466 00:22:28,880 --> 00:22:30,380 Speaker 10: how to deploy it in other cases. 467 00:22:30,780 --> 00:22:30,920 Speaker 2: Right. 468 00:22:30,940 --> 00:22:32,980 Speaker 4: There have been changes along the way, the most major 469 00:22:33,000 --> 00:22:36,369 Speaker 4: reform coming in 1983. What was the thinking in 1983 470 00:22:36,369 --> 00:22:38,729 Speaker 4: in terms of how to approach Social Security? 471 00:22:39,630 --> 00:22:41,330 Speaker 10: That the trust fund was about to be depleted and 472 00:22:41,369 --> 00:22:42,949 Speaker 10: they needed to do something in order to balance the 473 00:22:42,990 --> 00:22:44,149 Speaker 10: program's finances. 474 00:22:45,250 --> 00:22:46,929 Speaker 1: Social Security really has two eras. 475 00:22:46,990 --> 00:22:50,090 Speaker 10: In the first half of its 91-year existence, it was 476 00:22:50,130 --> 00:22:51,949 Speaker 10: a program that was constantly being changed. 477 00:22:51,970 --> 00:22:54,250 Speaker 1: It was added to, it was expanded, who was covered, 478 00:22:54,290 --> 00:22:55,470 Speaker 1: what situations was covered. 479 00:22:55,810 --> 00:22:57,620 Speaker 10: It was not at the start of the program in 480 00:22:57,619 --> 00:23:00,639 Speaker 10: 1935 that there were benefits for survivors or children, that 481 00:23:00,680 --> 00:23:03,000 Speaker 10: it covered disability, that it covered all workers, or that 482 00:23:03,040 --> 00:23:05,700 Speaker 10: the benefits were set in stone. In the first four 483 00:23:05,720 --> 00:23:07,960 Speaker 10: and a half decades, it was a lot of experimentation. 484 00:23:08,020 --> 00:23:09,899 Speaker 10: What do we want this program to look like How 485 00:23:09,920 --> 00:23:12,620 Speaker 10: do we make it work? Once it hit a pretty 486 00:23:12,660 --> 00:23:17,980 Speaker 10: dire fiscal state in the end of 1982 leading into 1983, 487 00:23:17,980 --> 00:23:20,830 Speaker 10: we passed a massive reform, and it's been basically in 488 00:23:20,850 --> 00:23:23,710 Speaker 10: a glass box ever since. We haven't touched it in 489 00:23:23,770 --> 00:23:26,969 Speaker 10: any significant way. That's the entirety of my lifetime and 490 00:23:27,070 --> 00:23:29,330 Speaker 10: almost five decades in between reforms. 491 00:23:29,970 --> 00:23:31,550 Speaker 1: That's a mistake in and of itself. 492 00:23:31,609 --> 00:23:34,540 Speaker 10: This is a program that benefits from responding to the 493 00:23:34,580 --> 00:23:35,580 Speaker 10: needs of Americans. 494 00:23:35,990 --> 00:23:36,940 Speaker 1: I think there's some people who. 495 00:23:36,880 --> 00:23:39,899 Speaker 10: Would argue that because of the actual dollar amount of 496 00:23:39,920 --> 00:23:42,320 Speaker 10: the benefits, maybe they're too high today. I think that 497 00:23:42,340 --> 00:23:46,780 Speaker 10: that's relatively inaccurate, considering that the replacement rates of benefits 498 00:23:46,880 --> 00:23:49,859 Speaker 10: are meant to be even over generations. I mean, the 499 00:23:49,880 --> 00:23:52,350 Speaker 10: question is, what are the other problems that Americans are facing? 500 00:23:52,400 --> 00:23:54,570 Speaker 10: Is there some way that we could continue to expand 501 00:23:54,590 --> 00:23:58,370 Speaker 10: this program or think creatively about benefits given today's economy? 502 00:23:59,140 --> 00:24:01,620 Speaker 4: What's the number one solution you can come up with, 503 00:24:01,680 --> 00:24:03,520 Speaker 4: at least short term, to kind of address this? I 504 00:24:03,560 --> 00:24:05,310 Speaker 4: don't know if that's even possible at this point, but 505 00:24:05,730 --> 00:24:06,330 Speaker 4: should there be one? 506 00:24:07,990 --> 00:24:10,240 Speaker 10: There's no smoking gun, all we need to do is 507 00:24:10,280 --> 00:24:12,859 Speaker 10: pull out this secret thing and then Social Security is 508 00:24:12,920 --> 00:24:14,659 Speaker 10: fixed for forever. We need to make a lot of 509 00:24:14,700 --> 00:24:17,639 Speaker 10: changes to the program, especially on the revenue side. 510 00:24:17,680 --> 00:24:19,629 Speaker 1: But there's also ways to expand it. 511 00:24:19,700 --> 00:24:22,170 Speaker 10: Social Security could be the source of a universal paid 512 00:24:22,190 --> 00:24:24,350 Speaker 10: family medical leave program so that every worker in the 513 00:24:24,390 --> 00:24:27,490 Speaker 10: United States has dignity when for some reason life happens 514 00:24:27,750 --> 00:24:29,270 Speaker 10: and they can't go to work for a few months. 515 00:24:29,590 --> 00:24:33,100 Speaker 10: Social Security could be the program that administers a fully 516 00:24:33,180 --> 00:24:36,879 Speaker 10: federal and generous unemployment system especially in the face of 517 00:24:36,940 --> 00:24:39,199 Speaker 10: the impending AI job loss that so many people are 518 00:24:39,240 --> 00:24:39,760 Speaker 10: worried about. 519 00:24:39,780 --> 00:24:41,140 Speaker 1: This is a program that. 520 00:24:41,080 --> 00:24:44,939 Speaker 10: Functions extremely well, that has very low administrative costs and 521 00:24:44,980 --> 00:24:47,919 Speaker 10: extremely high trust from the United States people, something that 522 00:24:47,960 --> 00:24:50,560 Speaker 10: the rest of government cannot say at the current moment. 523 00:24:50,600 --> 00:24:52,680 Speaker 4: So let's use this tool as what. 524 00:24:52,600 --> 00:24:53,440 Speaker 1: I try to advocate. 525 00:24:53,600 --> 00:24:55,000 Speaker 4: Yeah, that goes back to the poll that we were 526 00:24:55,020 --> 00:24:57,680 Speaker 4: just telling everyone about. Catherine, thank you so much. Catherine 527 00:24:57,780 --> 00:25:01,280 Speaker 4: Ann Edwards of Bloomberg Opinion on Social Security and why 528 00:25:01,300 --> 00:25:05,379 Speaker 4: it should be not fixed, but I should say it 529 00:25:05,400 --> 00:25:07,850 Speaker 4: should be preserved the way it is. Joining us right 530 00:25:07,890 --> 00:25:10,650 Speaker 4: now on Bloomberg Money is Ellen Zentner. She is chief 531 00:25:10,710 --> 00:25:13,230 Speaker 4: economic strategist and global head of thematic and macro investing 532 00:25:13,250 --> 00:25:17,250 Speaker 4: at Morgan Stanley Wealth Management to talk about personal investing, retirement, 533 00:25:17,450 --> 00:25:20,109 Speaker 4: and how you plan for your wealth. But I want 534 00:25:20,150 --> 00:25:22,770 Speaker 4: to get your reaction, first of all, to Social Security. 535 00:25:23,850 --> 00:25:26,220 Speaker 4: What does the projection of Social Security running out earlier 536 00:25:26,260 --> 00:25:29,320 Speaker 4: than anticipated mean for how someone manages their personal finances? 537 00:25:29,440 --> 00:25:31,520 Speaker 4: I guess it depends on whether you're a baby boomer, 538 00:25:31,580 --> 00:25:33,409 Speaker 4: you're Gen X, or you're manual. Yeah, absolutely. 539 00:25:33,470 --> 00:25:35,869 Speaker 1: I mean, I'm Gen X and I remember my parents 540 00:25:35,930 --> 00:25:39,890 Speaker 1: telling me when I was younger, don't count on Social Security. And, 541 00:25:40,320 --> 00:25:42,360 Speaker 1: I mean, the way costs are going in this economy, 542 00:25:42,420 --> 00:25:44,700 Speaker 1: maybe my Social Security would help pay for a few 543 00:25:44,740 --> 00:25:50,020 Speaker 1: groceries by the time I can collect. But anyhow, you know, 544 00:25:50,240 --> 00:25:54,760 Speaker 1: I have just come off a marketing trip to see 545 00:25:54,940 --> 00:25:58,060 Speaker 1: a lot of our clients on the West Coast. There's 546 00:25:58,100 --> 00:26:00,380 Speaker 1: not one meeting that goes by where they don't ask 547 00:26:00,440 --> 00:26:03,670 Speaker 1: about Social Security, about the sustainability of our federal debt. 548 00:26:04,010 --> 00:26:07,389 Speaker 1: These are things that families are really concerned about. And 549 00:26:07,530 --> 00:26:11,810 Speaker 1: as an economist, for Social Security, we have an aging population. 550 00:26:12,030 --> 00:26:14,470 Speaker 1: We know this. We've got a lot of aging baby 551 00:26:14,510 --> 00:26:17,540 Speaker 1: boomers aging out of the labor market. We need a 552 00:26:17,780 --> 00:26:21,860 Speaker 1: very robust replacement rate, meaning bodies coming into the labor 553 00:26:21,900 --> 00:26:25,120 Speaker 1: market and paying into the Social Security system. And, of course, 554 00:26:25,280 --> 00:26:28,379 Speaker 1: that is waning. We heard Catherine talk about possibly AI 555 00:26:28,420 --> 00:26:32,910 Speaker 1: taking jobs. We don't have population growth in this economy. 556 00:26:32,930 --> 00:26:34,090 Speaker 4: Immigration has been cut off. 557 00:26:34,410 --> 00:26:34,610 Speaker 2: Right. 558 00:26:34,670 --> 00:26:36,810 Speaker 1: And we just had the slowest growth in our country's 559 00:26:36,830 --> 00:26:40,670 Speaker 1: history in population. Birth rates are falling. And so just 560 00:26:40,750 --> 00:26:45,490 Speaker 1: for like. conversation starter just to get people saying, what? 561 00:26:45,930 --> 00:26:49,149 Speaker 1: I'll say things like, thank God for AI because we 562 00:26:49,210 --> 00:26:53,260 Speaker 1: don't have the bodies that we need. And so you 563 00:26:54,680 --> 00:27:00,860 Speaker 1: unit economic tax, the robotics, humanoids, all of these things 564 00:27:00,880 --> 00:27:04,399 Speaker 1: that are replacing labor, and that's what's paying into the system. 565 00:27:04,500 --> 00:27:06,820 Speaker 1: And I think that's where we're headed. Because that's what 566 00:27:06,859 --> 00:27:10,660 Speaker 1: fills the coffers of Social Security. This feels very dystopian. Well, 567 00:27:10,680 --> 00:27:14,060 Speaker 1: you constantly have to have, well, right, but, well, look 568 00:27:14,080 --> 00:27:15,840 Speaker 1: at the world that we're living in and look at 569 00:27:15,880 --> 00:27:18,340 Speaker 1: the technological advancements that we're going through. So we have 570 00:27:18,359 --> 00:27:20,060 Speaker 1: to think outside of the box of how do you 571 00:27:20,100 --> 00:27:22,619 Speaker 1: continue to fill those coffers of Social Security. It's a 572 00:27:22,660 --> 00:27:26,350 Speaker 1: revenue problem. And that would bring in more revenues. 573 00:27:27,040 --> 00:27:30,060 Speaker 4: So you've done a lot of proprietary work on longevity, 574 00:27:30,200 --> 00:27:32,060 Speaker 4: and this is kind of some of what you think 575 00:27:32,119 --> 00:27:35,310 Speaker 4: about as well. You point out that fertility rates are declining, 576 00:27:35,390 --> 00:27:38,230 Speaker 4: having kids super expensive, so fewer people are doing that, 577 00:27:38,290 --> 00:27:41,129 Speaker 4: and people are living longer. Are we going to end 578 00:27:41,190 --> 00:27:43,320 Speaker 4: up with a lot more older adults who are driving 579 00:27:43,340 --> 00:27:45,940 Speaker 4: the economy? Their spending is the engine of this economy? 580 00:27:46,640 --> 00:27:49,760 Speaker 1: Not necessarily. I would think of it as... With each 581 00:27:49,800 --> 00:27:52,619 Speaker 1: generation that comes along, they've got different priorities and they 582 00:27:52,660 --> 00:27:55,040 Speaker 1: do spend differently. I think what I would do is 583 00:27:55,220 --> 00:28:00,909 Speaker 1: focus on more the aging of the population. And the 584 00:28:00,950 --> 00:28:03,830 Speaker 1: demographers believe that people who are 65 today in developed 585 00:28:03,850 --> 00:28:07,590 Speaker 1: countries with good access to health care are going to 586 00:28:07,630 --> 00:28:12,730 Speaker 1: live into their 90s. That's not even children that are 587 00:28:12,750 --> 00:28:15,530 Speaker 1: born today where they believe more than 50% of children 588 00:28:15,570 --> 00:28:19,389 Speaker 1: born today will live to be 100. We have more 589 00:28:19,470 --> 00:28:23,369 Speaker 1: clients than I can count that are in their 90s, 590 00:28:23,930 --> 00:28:27,580 Speaker 1: that are over 100. And so what we've been focused 591 00:28:27,710 --> 00:28:30,820 Speaker 1: on is when we are living longer, which is a 592 00:28:30,880 --> 00:28:34,380 Speaker 1: great thing, what do we do when people that would 593 00:28:34,440 --> 00:28:38,320 Speaker 1: normally inherit in their 40s, in their 50s, and use 594 00:28:38,360 --> 00:28:40,780 Speaker 1: that to buy a home or pay off their mortgage 595 00:28:40,820 --> 00:28:43,360 Speaker 1: or put their kids through college, what do they do 596 00:28:43,400 --> 00:28:46,540 Speaker 1: when they're inheriting in their 60s and their 70s? So 597 00:28:46,580 --> 00:28:49,960 Speaker 1: we have to think about wealth and transferring wealth in 598 00:28:50,000 --> 00:28:53,250 Speaker 1: a different way. Because as we live longer, we might 599 00:28:53,310 --> 00:28:57,470 Speaker 1: have different chapters of ourselves in the labor force. We 600 00:28:57,530 --> 00:29:00,430 Speaker 1: might pass on money beforehand. We might do a lot 601 00:29:00,470 --> 00:29:04,870 Speaker 1: more generation skipping. Planning, financial planning has to change overall. 602 00:29:05,290 --> 00:29:08,380 Speaker 4: It's become a lot more complex, hasn't it, to plan 603 00:29:08,390 --> 00:29:11,340 Speaker 4: for your finances, to plan for a transfer of wealth. 604 00:29:11,920 --> 00:29:14,980 Speaker 4: especially since you're saying different stages, it might happen early 605 00:29:15,060 --> 00:29:16,280 Speaker 4: on and then it might have to happen again. 606 00:29:16,300 --> 00:29:16,720 Speaker 3: Yeah. 607 00:29:17,060 --> 00:29:20,460 Speaker 1: And what I've been telling clients that I've been meeting with, 608 00:29:20,480 --> 00:29:22,760 Speaker 1: because on the wealth side of the business is very 609 00:29:23,000 --> 00:29:28,740 Speaker 1: personal conversations and they're very hyper-personalized. And so, you know, 610 00:29:28,790 --> 00:29:34,290 Speaker 1: as an economist, yes, the equity market is going like gangbusters. 611 00:29:34,530 --> 00:29:38,070 Speaker 1: Everybody's seen their financial wealth increase, but it's still the 612 00:29:38,130 --> 00:29:42,580 Speaker 1: case that the bulk of of wealth creation in the U.S. 613 00:29:42,640 --> 00:29:46,680 Speaker 1: is generally through homeownership. And you've got a generation that 614 00:29:46,740 --> 00:29:49,790 Speaker 1: is just shut out of homeownership. So we talk about 615 00:29:49,810 --> 00:29:51,490 Speaker 1: it taking a village to raise a child. It takes 616 00:29:51,530 --> 00:29:55,000 Speaker 1: a village to buy a home. And so just helping 617 00:29:55,060 --> 00:29:59,640 Speaker 1: the next generation, you're sitting on the wealth. It's compounding. 618 00:29:59,660 --> 00:30:03,020 Speaker 1: A lot of people don't even realize how much it's compounding. 619 00:30:03,080 --> 00:30:05,380 Speaker 1: By the time they retire, they think they're retiring with 620 00:30:05,820 --> 00:30:07,980 Speaker 1: a few million dollars, and they find out they're retiring 621 00:30:08,000 --> 00:30:08,680 Speaker 1: with $ 10 million. 622 00:30:08,800 --> 00:30:10,100 Speaker 4: They had no idea that that was coming. 623 00:30:10,120 --> 00:30:12,070 Speaker 1: And they had no idea. And so give it to 624 00:30:12,110 --> 00:30:14,550 Speaker 1: your children. Help them buy a home, that first home. 625 00:30:14,690 --> 00:30:16,610 Speaker 1: Help them start to create wealth that way. 626 00:30:17,090 --> 00:30:18,870 Speaker 4: So the other thing about the people who figure out 627 00:30:18,890 --> 00:30:20,950 Speaker 4: that they actually have a lot of money, oftentimes that's 628 00:30:21,010 --> 00:30:24,290 Speaker 4: women because they tend to outlive men. What do we 629 00:30:24,350 --> 00:30:28,030 Speaker 4: know about how women approach saving and spending that's different 630 00:30:28,050 --> 00:30:28,350 Speaker 4: than men? 631 00:30:28,690 --> 00:30:31,140 Speaker 1: It is different than men. So we have more than 632 00:30:31,140 --> 00:30:36,520 Speaker 1: $ 130 trillion in wealth transfer that's coming. More than $ 50 633 00:30:36,360 --> 00:30:38,979 Speaker 1: trillion of that will go to women first. Exactly what 634 00:30:39,020 --> 00:30:42,680 Speaker 1: you said. It's not our fault. We live longer. So, 635 00:30:42,980 --> 00:30:47,750 Speaker 1: and they behave differently. We find that they are much 636 00:30:47,830 --> 00:30:53,450 Speaker 1: more apt to invest in philanthropic activities and impact investing. 637 00:30:53,790 --> 00:30:57,110 Speaker 1: And they just move through the world differently. They are 638 00:30:57,290 --> 00:31:01,780 Speaker 1: more involved in education and healthcare. Oftentimes, the oldest, and 639 00:31:01,820 --> 00:31:04,420 Speaker 1: it happens to be female in the family, the oldest 640 00:31:04,500 --> 00:31:08,540 Speaker 1: child is the caregiver. for the aging parents. And so 641 00:31:08,580 --> 00:31:12,060 Speaker 1: they've got different priorities. And so we try to do 642 00:31:12,140 --> 00:31:15,240 Speaker 1: deep dives into understanding how women invest differently so we 643 00:31:15,260 --> 00:31:19,950 Speaker 1: can prepare our financial advisors for that coming wealth transfer. 644 00:31:20,710 --> 00:31:22,510 Speaker 4: And we're starting to see that already take place, and 645 00:31:22,550 --> 00:31:25,030 Speaker 4: it's only going to accelerate in the next 20, 30 years. 646 00:31:25,150 --> 00:31:25,430 Speaker 3: It is. 647 00:31:25,790 --> 00:31:27,750 Speaker 1: And I'll tell you what's really interesting that's coming up 648 00:31:27,790 --> 00:31:31,160 Speaker 1: in conversations as well is that in 2008 with the 649 00:31:31,220 --> 00:31:36,520 Speaker 1: financial crisis, we were really— we economists were really worried about 650 00:31:36,640 --> 00:31:41,720 Speaker 1: millennials because— In social economics, we believe that your entire 651 00:31:41,760 --> 00:31:44,500 Speaker 1: lifetime earnings is determined by where we are in the 652 00:31:44,540 --> 00:31:47,040 Speaker 1: business cycle when you graduate. And it took them so 653 00:31:47,180 --> 00:31:50,770 Speaker 1: long to get jobs. But you look today at new 654 00:31:50,790 --> 00:31:52,950 Speaker 1: data from the Fed, and if you take the median 655 00:31:52,990 --> 00:31:57,550 Speaker 1: age of a millennial today, they are very much better 656 00:31:57,750 --> 00:32:00,830 Speaker 1: off than baby boomers were at that age, than Gen X, 657 00:32:01,070 --> 00:32:02,890 Speaker 1: my generation, was at that age. Because of the stock market. 658 00:32:03,010 --> 00:32:04,930 Speaker 1: Because of the stock market and the accumulation of wealth. 659 00:32:04,950 --> 00:32:05,750 Speaker 1: So they've caught up. 660 00:32:06,390 --> 00:32:10,510 Speaker 4: All right. Growth stocks and being aggressive in their allocation then. Ellen, 661 00:32:10,610 --> 00:32:13,080 Speaker 4: thank you. A pleasure. And really, come back to Bloomberg 662 00:32:13,100 --> 00:32:16,800 Speaker 4: Money soon. Ellen Zentner, Morgan Stanley Wealth Management. 663 00:32:17,000 --> 00:32:17,959 Speaker 1: Really appreciate it. Thank you. 664 00:32:23,640 --> 00:32:26,660 Speaker 4: Bloomberg Money is your new destination for personal finance. This 665 00:32:26,720 --> 00:32:29,680 Speaker 4: is a cross-platform effort that extends beyond your television screen, 666 00:32:29,820 --> 00:32:33,580 Speaker 4: including our new digital hub at Bloomberg.com slash money. And 667 00:32:33,720 --> 00:32:35,720 Speaker 4: one story that caught my eye this week was about 668 00:32:36,000 --> 00:32:39,220 Speaker 4: online gambling. According to a new Bank of America report, 669 00:32:39,440 --> 00:32:41,860 Speaker 4: one in five respondents to the survey saw sports betting 670 00:32:42,080 --> 00:32:44,620 Speaker 4: as an investment, or at least one kind of investment. 671 00:32:45,000 --> 00:32:47,180 Speaker 4: This week at Bloomberg's Power Players event held here in 672 00:32:47,200 --> 00:32:49,590 Speaker 4: New York, I sat down with the president of FanDuel 673 00:32:49,960 --> 00:32:51,940 Speaker 4: and directly asked him if he thinks that sports betting 674 00:32:51,980 --> 00:32:54,550 Speaker 4: is a form of entertainment or some kind of investing. 675 00:32:54,690 --> 00:32:55,250 Speaker 4: Here's what he said. 676 00:32:56,650 --> 00:33:01,130 Speaker 9: It's primarily, it's pretty much purely entertainment for me personally, 677 00:33:01,150 --> 00:33:04,610 Speaker 9: and I think that's the way, that's the experience of 678 00:33:04,670 --> 00:33:06,950 Speaker 9: most of the customers on our platform. I think you're 679 00:33:06,990 --> 00:33:11,290 Speaker 9: not going to hear us talk about to our customers 680 00:33:11,470 --> 00:33:13,620 Speaker 9: about spending time on FanDuel as a place that they're 681 00:33:13,640 --> 00:33:16,729 Speaker 9: going to be investing their money for return. 682 00:33:18,160 --> 00:33:20,920 Speaker 4: Bloomberg's Zijia Song wrote the story about this report, and 683 00:33:20,940 --> 00:33:23,210 Speaker 4: she joins us now. So what surprised you in the 684 00:33:23,270 --> 00:33:25,930 Speaker 4: findings of this report? Because you've written about how the 685 00:33:26,030 --> 00:33:30,730 Speaker 4: lines are blurring for young investors between sports betting and investing. 686 00:33:30,990 --> 00:33:34,090 Speaker 3: Yeah, exactly. I think this report really provides a new 687 00:33:34,190 --> 00:33:38,690 Speaker 3: insight into kind of the recovery ratio for investors. 688 00:33:39,050 --> 00:33:41,469 Speaker 4: Actually, not investors, bettors in this instance. There you go. 689 00:33:42,190 --> 00:33:43,950 Speaker 4: Freudian flip there. Exactly. 690 00:33:44,780 --> 00:33:48,440 Speaker 3: So this Bank of America report shows that for every 691 00:33:48,460 --> 00:33:51,800 Speaker 3: dollar that's put into these online betting companies, which includes 692 00:33:52,260 --> 00:33:57,620 Speaker 3: sports betting sites like FanDuel or prediction markets, only 75 693 00:33:57,620 --> 00:34:00,380 Speaker 3: cents are recovered. Of course, some of the winnings might 694 00:34:00,460 --> 00:34:03,270 Speaker 3: stay on the platform so that people can roll that 695 00:34:03,330 --> 00:34:07,170 Speaker 3: into future wagers. But it really shows that online betting 696 00:34:07,310 --> 00:34:11,530 Speaker 3: is really not a form of sustainable income or payment. 697 00:34:11,989 --> 00:34:13,620 Speaker 4: All right, Zi Jia, thank you so much. Zi Jia 698 00:34:13,640 --> 00:34:17,040 Speaker 4: Song with the latest on how increasingly scores of young 699 00:34:17,060 --> 00:34:20,400 Speaker 4: sports fans are placing their first bets and treating it 700 00:34:20,440 --> 00:34:35,339 Speaker 4: as investing. This is the Bloomberg Money Podcast, bringing you 701 00:34:35,390 --> 00:34:38,080 Speaker 4: a smart look at the forces shaping your financial life. 702 00:34:38,500 --> 00:34:40,940 Speaker 4: I'm Scarlett Fu with Tom Keen. You can watch the 703 00:34:40,980 --> 00:34:44,259 Speaker 4: show live on Bloomberg Television every Friday at noon, Wall 704 00:34:44,280 --> 00:34:47,560 Speaker 4: Street time. Subscribe to the podcast on Apple, Spotify, or 705 00:34:47,640 --> 00:34:50,220 Speaker 4: anywhere you listen. And as always, on the Bloomberg Terminal 706 00:34:50,400 --> 00:34:51,610 Speaker 4: and the Bloomberg Business app.