00:00:02 Speaker 1: Bloomberg Audio Studios. Podcasts. 00:00:05 Speaker 2: Radio. 00:00:06 Speaker 3: News. 00:00:07 Speaker 4: Bloomberg Money. 00:00:12 Speaker 2: This is the Bloomberg Money Podcast. I'm Tom Keen with Scarlett Fu. Join us each week for a smart look at the forces shaping your financial life on personal finance, on retirement, and wealth management. We will explore how people are earning, investing, and building wealth. We are live Fridays at noon Eastern on Bloomberg Television. Subscribe to the podcast wherever you listen, and as always, on the Bloomberg Terminal and the Bloomberg Business app. 00:00:55 Speaker 1: Good noon, everyone. 00:00:56 Speaker 2: Bloomberg Money here. Scarlett Fuentonke, thank you for being with us. What an odd, what an exhausting week we have had here with the traffic. You went crosstown. Did it take 20 minutes or an hour to get here? I had to get out. 00:01:08 Speaker 1: I had to walk. I mean, I had to wait behind barricades. 00:01:11 Speaker 3: It's just. 00:01:11 Speaker 2: Junior's pro at that, Miles Miller. Record five different taxi cabs. 00:01:16 Speaker 5: Oh, my gosh. 00:01:16 Speaker 2: To get over to the Deutsche Bank Center. 00:01:18 Speaker 1: How much did that whole thing cost? 00:01:19 Speaker 2: It was, I don't know, Reto Gregori's Keeper of the Amex is the only one who knows that information. It's a really twisted and special Bloomberg Money today, but we have to go to it. The back end of the show, Taylor Swift will join us. 00:01:32 Speaker 1: Oh, that's a good piece. 00:01:33 Speaker 2: Out with her new single. That's a good piece. That's a zeitgeist right now. 00:01:37 Speaker 1: That's how people are spending their money. 00:01:39 Speaker 2: We've got a great, great show for you. Jeffrey Rosenberg holds on to Florida BlackRock. Really good out of Carnegie Mellon and Tepper Institute. Jeff Rosenberg, the high yields. Forget about the math. What does it mean for your personal finance, your retirement, your wealth management? 00:01:53 Speaker 1: And we've got Barry Ritholtz. He's founder and chairman of Ritholtz Wealth Management. He's host of Masters in Business on Bloomberg Radio. He's going to talk about how wealth is actually created in America. And hint, it involves taking risks. 00:02:06 Speaker 2: Stop the show. His book is phenomenal. Because it's got the word not. How not. How not to screw up. That's the name of the book. It's done really well. It deserves to be. We're thrilled to have Barry with us, given the tumult that we've seen this week. Data check. Scarlett's going to go across. I've got the stock data check for you here. And, you know, Friday, it was a nice uptick. I think more than a normal August Friday. We're into the market now with the Dow up 356%. To me, the story is a VIX, which goes against surging dollar, surging interest rates, surging into the weekend. What do you do with your 401k? I have no idea. 00:02:41 Speaker 1: Big question mark. All right. Speaking of surging interest rates, yields on the 10-year are at the highest since 2007. You can see they're 5.16%. The five-year yield is trading above 5%. We're going to get into bonds a little bit later on. Stocks are set to close out the week with a modest gain. The dollar is down. somewhat weaker. And look at that. Oil prices down 2% for the week, but it doesn't feel like it. 00:03:02 Speaker 2: Audible loftus. We're going to do an Audible here with a remote camera here. Get over here. I got to fix my bow tie. That's the first thing. There we go. Nikki Waller with us today, running all of our personal finance, just doing a superb job of timely stories. 00:03:16 Speaker 6: There. 00:03:16 Speaker 2: Miles Miller is with us. To say he's a senior reporter doesn't even describe. 00:03:21 Speaker 1: He covers all sorts of things, yes. 00:03:22 Speaker 2: His handle on this great metropolitan five-borough New York City and also down in Washington. as well. Can you bring the camera over here? I mean, could you look at Carol Master's notes? What do you think this is like? We don't have any notes. 00:03:35 Speaker 7: This is my world. 00:03:37 Speaker 3: I know. 00:03:37 Speaker 1: I'm a note and a paper girl. 00:03:39 Speaker 2: What are you and Tim doing this afternoon? 00:03:40 Speaker 1: What are we doing? 00:03:41 Speaker 8: We're going to do a little bit of China. We're going to be talking a little bit about Cuba. Still staying with the U.N. I feel like it's been such a. 00:03:47 Speaker 2: Yeah, and I agree. And Eric Martin's Marco Rubio story, Bloomberg Businessweek, world class on the secretary. 00:03:53 Speaker 1: Yeah, he's been covering national politics, national security. 00:03:56 Speaker 2: Let's jump into it right now. Nikki Waller with us on personal finance here. I have no idea how you start your Monday morning meeting given the present chaos. Is your world turned upside down? 00:04:07 Speaker 9: No, our world is very curious about what's going on. And our week actually started over the weekend because when we saw those mortgage rates last week, we sent reporters out to open houses around the country. 00:04:18 Speaker 3: Thank you. 00:04:19 Speaker 9: And we talked to sellers and we talked, we couldn't find any buyers, but we talked to sellers and we talked to realtors. 00:04:24 Speaker 1: About exactly how stalled things feel. 00:04:27 Speaker 2: Is price moving? 00:04:28 Speaker 7: Prices are moving down. 00:04:29 Speaker 9: People are having, sellers are having to cut their prices a lot. We talked to one guy who had to cut his price twice, more than six figures in 10 days. 00:04:38 Speaker 1: The first was when he. 00:04:39 Speaker 9: Had an open house and only two people came. The second was after the Fed raised rates last week. 00:04:44 Speaker 1: And it goes back to the volatility that we've seen in bond markets, Carol, and people talking about how we're in this new era. The days of zero interest rates are long gone. It is a new era. 00:04:53 Speaker 8: Bring up the bond boards here at Bloomberg, and all of a sudden you're seeing 5% all along the curve. And what's interesting, you think about U.S. Treasuries, really the global bellwether, right? So whether it's the impact on consumers, on corporations, on governments. This is a game changer. We keep saying, though, it's not like the late 70s, early 80s when you were seeing rates up in the teens. But nonetheless, it has an impact. And for a generation who's never seen something like this, it's a big deal. 00:05:17 Speaker 1: Absolutely. Let's bring in Miles Miller to all of this, because here we are in New York City and we had the U.N. General Assembly week. There are a lot of people walking around. There's a lot of wealth. Wait, the U.N. was happening this week? 00:05:28 Speaker 6: I know. 00:05:28 Speaker 1: In case you didn't notice, I know that you covered the city and the security and all that. This week started off with a lot of flight chaos, right? We had the flights halted at all of New York City airports. It's going to probably end with a nor'easter storm. So people are having a hard time getting in and out of the city to attend to all of New York City's offerings, including diplomacy. 00:05:47 Speaker 10: Yeah, this was quite a crazy week in New York, right? It wasn't just the U.N. General Assembly. Of course, the Metropolitan Opera came back. The New York City Ballet came, and I went to opening night for the ballet. It was quite a crazy week to get around town. But yes, it began with all those travel troubles. Of course, New Jersey Transit involved a line cut that went to TRACON, which operates all of air traffic control. And because of that, world leaders were delayed getting in. They fixed that. And then we've got all the traffic tie ups. And then we've got Benjamin Netanyahu in town giving his big speech, fighting with Mayor Mamdani. It was quite a week for diplomacy and also getting around. 00:06:27 Speaker 2: We've undersold it. You have four Emmy Awards. You've grounded out in the five boroughs in New York City. Why are we moving to Philadelphia? I mean, it's just as simple as that. Wealth management, personal finance, it's not working in Boston. It's not working in New York City. 00:06:44 Speaker 10: Yeah, Philadelphia, whenever you look at, and I worked in Philly. I worked at WTXF there, which is the Fox station. Spent a good amount of my career covering South Jersey there. It makes sense, right? Because it's so much cheaper to live in Philadelphia. Your money goes so much farther. And there are people who get on that Amtrak and pay for that 12-trip ticket or get that multi-trip ticket. It just makes more sense. 00:07:08 Speaker 1: You know, Nikki, this reminds me of a story that your team wrote about how the marker of financial success in America has really shifted. Once upon a time, it was buying a home, but that's no longer the case. 00:07:18 Speaker 9: Yeah, you can say the American dream is being redefined for a lot of people. And it is less about following those traditional milestones that we're talking about and more about actually enjoying your life right here and now. Even if you have a down payment, the carrying costs of a home are hard or the rates are high, as we're talking about. And prices, while their individual prices are coming down, they're not coming down broadly. 00:07:41 Speaker 1: And actually, I'm not sure we all want that. 00:07:43 Speaker 2: What's your sense within what you and Tim are doing of how many people have missed this bull market? And I'm not talking about fancy Jeff Rosenberg math. I'm talking about just because of caution or gloom or poverty or they just can't make the bills, they miss this bull market. 00:07:59 Speaker 1: We talk about this a lot. 00:08:00 Speaker 8: And obviously, you go back to Peter Atwater at William & Mary and talking about the K-shaped economy. I mean, not everybody's in the financial market. There are folks that are still really struggling. 00:08:08 Speaker 1: Look at consumer sentiment. Exactly. 00:08:11 Speaker 11: Well done. 00:08:11 Speaker 8: We see strong retail numbers, but consumer sentiment is down and gas prices are up. We saw diesel hit a record high. I mean, these are things where there are lots of families struggling. I'm amazed at even the amount of conversations we have in the newsroom where folks that you would think are doing fairly well and they're saying, I feel pinched. 00:08:27 Speaker 1: I'm making decisions. 00:08:29 Speaker 8: So I think there's many stories to tell when it comes to this economy. And it plays out politically. 00:08:34 Speaker 1: Yeah. How much did you pay for gas when you went to the pump? 00:08:37 Speaker 7: Oh, I'm sorry. 00:08:37 Speaker 1: You don't do that. 00:08:39 Speaker 2: I don't do that. I'm above it all. It's not good. I mean, miles is in the trenches on this. And there's a lot of people. I mean, diesel, you go New York City, diesel doesn't matter. Sit on 59th Street and count the diesel trucks that go by. 00:08:52 Speaker 10: The diesel costs are insane. I mean, I, I gas up probably twice or three times a week. I have two cars right now trying to get down to one. That's a different story for a different day, but you know, but, but to fill up the Yukon is insane. That is probably $ 80 to fill up. So I always do half a tank. It's just easiest to do half a tank because you know, I, I don't know. 00:09:17 Speaker 7: I don't want to pay. And you know, we talk about this a lot. 00:09:19 Speaker 10: Like we were going to a lot of concerts this summer, going to concerts and events. I'm like, Affirm and Klarna look really good for young people because, as you were saying, they want to have good experiences. So how do you make those experiences? That's brilliant. Are those platforms successful? 00:09:35 Speaker 1: Yeah, they're really successful. 00:09:36 Speaker 9: People are using them for exactly what Mike Miles is talking about. They're using them for Knicks tickets. They're using them for Taylor Swift. They're also, though, more often using them for everyday expenses. This is now becoming a rotating line of credit for a lot of people to get by. 00:09:54 Speaker 8: Well, I love the story that you guys have about finance maxing strategies, how you have this whole generation who are trying to figure out how to save money. So it's the buy now, pay later. They're moving in with their families again. I mean, all these different things that they are doing, sharing, streaming, subscriptions, like these things that they are doing to kind of save money. 00:10:10 Speaker 9: Yeah, and at the same time, they are investing. I mean, you look at Gen Z, they are more heavily invested in retirement and their 401ks than their forebears. 00:10:19 Speaker 2: Can I go political here? Bloomberg Money, why not? We got Miles with us today. 00:10:22 Speaker 1: Yeah, go for it. 00:10:23 Speaker 2: How's the mayor doing? 00:10:24 Speaker 7: Mayor's having a great week. 00:10:25 Speaker 2: He really is. Mr. Netanyahu is pounding him at the U.N. 00:10:29 Speaker 10: But he's masterful at the way that he handles this situation with Trump. He knows he's going to have this negative interaction with Netanyahu being here. It has his biggest ally, Trump, in the backyard of Archibald Gracie's mansion, a mansion that he knows that Trump loves and has been to in the past. Trump is waging war against the media. He brings the world's media to Gracie Manchin. The first three or four questions come from all of the outlets that Trump has banned at the White House. 00:10:57 Speaker 2: It was masterful. 00:10:58 Speaker 7: I mean, it was truly masterful. 00:11:00 Speaker 2: Is this the first Friday Miles has been in the office since when? Since Taylor Swift last held him, right? 00:11:06 Speaker 1: Yeah, just get on his case. 00:11:07 Speaker 2: Something like that. 00:11:08 Speaker 1: Miles, what do you make of that relationship between President Trump? 00:11:10 Speaker 2: Who's in charge here? 00:11:11 Speaker 6: I don't. 00:11:12 Speaker 2: I am blown away. But have you seen the video? 00:11:15 Speaker 11: Well, you're always in charge. 00:11:16 Speaker 1: We know that. 00:11:18 Speaker 8: But that relationship between President Trump and Mayor Mamdani from the get-go. 00:11:23 Speaker 10: Yeah, I mean, I think the mayor's team quickly realized that they would get more bees with honey. 00:11:30 Speaker 2: Is that what they say? Yes, correct. 00:11:32 Speaker 7: More flies with honey. 00:11:34 Speaker 10: And so going down there and meeting with him from the beginning, instead of taking this adversarial tone, has played dividends for them. And it's been marvelous to see. And also, two Queens guys being. 00:11:47 Speaker 1: Able to talk. 00:11:47 Speaker 10: I mean, Trump really fashions himself as a Queens guy. He's like, I had a building in Sunnyside. It's like, you know, this is the leader of the free world talking to brass tacks about Queens. 00:11:57 Speaker 2: It's really interesting. 00:11:57 Speaker 1: Two Queens guys at the end of the day. All right, Miles Miller, Carol Masser, and Nikki Waller, thank you so much for joining us in our Money Roundtable. 00:12:04 Speaker 2: Should we have Masser back? 00:12:05 Speaker 4: It's 50-50. 00:12:06 Speaker 1: Oh, for sure. But I did wear the Hermes sky. 00:12:09 Speaker 11: I thought we were going to talk about Williamsburg. 00:12:10 Speaker 2: We didn't get there. 00:12:11 Speaker 1: We didn't get there. Next time, next time. Mine's too. 00:12:14 Speaker 3: I know. 00:12:15 Speaker 1: For you. Coming up, we've got a conversation with BlackRock's Jeffrey Rosenberg with a focus on personal finance, retirement, and wealth management, looking at the craziness in the bond market. This is Bloomberg Money. 00:12:27 Speaker 2: We'll do Mez Williamsburg. 00:12:29 Speaker 12: I know. 00:12:30 Speaker 1: You know what? It was hard to make that transition. 00:12:32 Speaker 11: I know. 00:12:32 Speaker 8: Some consumers are doing very well. 00:12:36 Speaker 1: Some consumers are feeling very. 00:12:40 Speaker 2: You're listening to Bloomberg Money. Stay with us with more to come after this. Bloomberg Money On a Friday, Bloomberg Money. Thank you so much for joining us. Our videos are out there as well. Do a great job of that on YouTube. Look for that Saturday morning. It takes a while to put them all together. Again, we always lead with Scarlett Fu in our videos as well. I look at the number of countries to go to, like top 10 countries to retire to, top 20. Don't go to these five. And always in the top of the list is a country, I think it's a surprise to people, Norway. 00:13:18 Speaker 1: Norway, Scandinavian country. Well, the Scandinavian countries are known for their happiness ratings, right? They tend to do pretty well there. 00:13:24 Speaker 2: That's why I never would go there, but that's a separate issue. 00:13:27 Speaker 1: It doesn't fit in naturally with you. Yeah, if you look at Bloomberg.com slash money, which is our homepage, your destination for personal finance, this is a cross-platform app. effort that extends beyond your television screen. This is a story that definitely got our attention. Norway tops the global retirement index for a second straight year. And a lot of it has to do with the fact that retirement systems are under pressure and people are worried that their country is going to run out of money. But Norway is a oil powerhouse. And it has a massive sovereign wealth fund. There's a lot of wealth in that country. 00:13:59 Speaker 2: And there's more than Oslo. The stereotype is Helsinki over west to Stockholm and then over to Oslo. And they're all different. I get that. And it's actually fairly expensive. It is not the cheapest place. 00:14:11 Speaker 3: No, it isn't. 00:14:11 Speaker 1: But there's a strong social safety net. 00:14:13 Speaker 2: The social safety net is world class because of all that oil in there. 00:14:17 Speaker 1: But also key is that it's not a big country. It's a small country. So you can do all those things and not go bankrupt. I mean, you think about Singapore and what they're able to do. It's really hard to replicate that model in a China or in the U.S. 00:14:30 Speaker 2: I sat at the Raffles Outdoor Bar in Singapore three lifetimes ago and said it's too hot and muggy. You never feel that. 00:14:37 Speaker 1: You can never retire in Singapore. 00:14:37 Speaker 2: You never feel that in Norway. 00:14:39 Speaker 1: No, no, no. 00:14:39 Speaker 2: Not at all. But, you know, I would say this is front and center. I've said for years, Scarlett, that The American retirement system has failed. The percentage with zero retirement. 00:14:49 Speaker 1: I mean, I kind of always assumed that there would be no Social Security by the time I would need it. I just kind of operate on that assumption. 00:14:55 Speaker 2: And we had Jack Lew with us, folks, the former Treasury secretary a month ago or so, who made clear after the election of 2028, there's no other issues. the amendment of Social Security as well. But I think the 10 countries, it's all a different story. Susan, we've got five of them here. Ireland is boom if you can afford the real estate. Renting your owner is extraordinary. 00:15:18 Speaker 1: So Western Europe, highly represented there. And again, social safety net. 00:15:22 Speaker 2: These are where the fancy people are retiring, I would say. These are all more expensive than what you see in Southeast Asia with Vietnam. 00:15:30 Speaker 6: Malaysia. 00:15:30 Speaker 2: And with Bangkok, Malaysia, and with the Philippines as well. Oh, look at that. 00:15:34 Speaker 1: Czech Republic is on there as well. 00:15:36 Speaker 6: Yeah. 00:15:36 Speaker 1: As the 10th one. 00:15:38 Speaker 2: You know, we'll have to see. We'll have to see on it. But I would say this is front and center. It's something Scarlett and I want to do much more of as we go into 2027. 00:15:47 Speaker 1: I mentioned how oil prices are lower today, but it doesn't feel like it. They just took another leg lower. And in fact, that has given stocks a boost in intraday trading right now. You have the major indexes in the green now. The Dow, the S & P and the Nasdaq taking the leg up because there's hopes that there's going to be some kind of diplomatic way to end the war in Iran. Oil prices again down. 00:16:07 Speaker 2: We look at equities, bonds, currencies, commodities. Scarlet food demands it, I say. And you see it with oil there at 101 a barrel. Yields have been remarkable, particularly the 30-year. We're going to go to Jeff Rosenberg in a bit on that. But right now, an important interview. It is not O Canada, it is O Mexico. And we know at Bloomberg that so many within the Schoenbaum administration listen. to our Bloomberg work from Scarlett and myself and others each and every day. He is the Foreign Affairs Secretary for Mexico, a demanding job of the University of Chicago. David Gurra with Roberto Velasco Alvarez. 00:16:45 Speaker 6: David. 00:16:46 Speaker 3: Thank you very much, Mr. Secretary. 00:16:47 Speaker 13: Thank you very much for being here. You have spent your career focused in part now on the North American relationships between U.S., Mexico and Canada. How do you assess the state of the U.S.-Mexico relationship right now? 00:16:59 Speaker 4: Well, we have a relation that has a lot of dialogue. We have a relation with deep cooperation on many different areas, including security, based on what we view as core principles like respect to our sovereignty and territorial protection. integrity, but taking all of that, I think it's overall a good relation, a strong relation. 00:17:22 Speaker 13: No doubt you heard the President of the United States speaking here. He talked about Mexico as the epicenter of cartel violence. He said it was unacceptable that the U.S. could have a 2,000-mile border with a country that is, in his estimation, controlled by cartels. How do you respond to that? 00:17:35 Speaker 4: Well, what I can tell you is that in the past two years, the homicide rate in Mexico has halved. There's a 51% reduction in homicides in Mexico. Most crimes are also in a downward trajectory. 00:17:50 Speaker 3: There's a lot of. 00:17:51 Speaker 4: Progress given the new government security strategy that includes a new focus on intelligence and investigations. There's also, as I said, cooperation with the United States based on these four principles that we also include what we call cooperation without subordination. 00:18:13 Speaker 2: Is there total alignment with the U.S. 00:18:15 Speaker 13: When it comes to its approach to violence in the region, or do you differ with the U.S. 00:18:19 Speaker 1: In some way? 00:18:19 Speaker 4: No, I think the U.S. has a different approach with other countries. We have our own approach to cooperation. As I said, these principles for us are fundamental. They are in our constitution. We have to respect our legal framework. But with that considered, I think we have good work. We have good progress and we have good achievements. I mean, if you look at, for example, the numbers at the border, there's a 60 percent reduction in the fentanyl that is reaching the border. The White House has recognized that. There's also a historic reduction in the figures of irregular migration that we've seen. in the border in the past couple years, so I think we are in a different situation from where we were before. 00:19:09 Speaker 13: We've seen other countries enter into joint military operations with the U.S. Seems that's a red line for you. Is that something that you wouldn't consider? 00:19:15 Speaker 4: Well, for Mexico, as I said, there has to be respect for our territorial integrity, for our sovereignty, and that entails that operations in Mexico only correspond to Mexican authorities. 00:19:29 Speaker 13: We've seen the deportation of more than 200,000 Mexicans during the start of the president's second term. What's the impact of that been on your country, having that influx of Mexicans returning to Mexico? 00:19:39 Speaker 4: Well, we have a strategy to receive our citizens when they are returned from the United States. 00:19:45 Speaker 3: It's called Mexico Te Abraza. 00:19:47 Speaker 4: And we provide access to social media programs, we provide basic resources so they can reintegrate to Mexico and they can get jobs, they can get access to healthcare, And so far, I think we've been successful in receiving our Mexican fellows, you know, as what they are. 00:20:08 Speaker 3: Part of our country. 00:20:09 Speaker 13: There are the Mexican fellows, as you put it. There are also these third country deportations as well, thousands of... people not from Mexico being sent there. And I'm curious, do you welcome that, these third country deportations? 00:20:19 Speaker 4: Well, there is a number of people that are rejected at the border in the United States and out of humanitarian grounds. We have received some of these individuals and we provide them with an opportunity to return to their countries of origin or in cases where they require protection in Mexico, we offer them pathways as well. 00:20:41 Speaker 13: Give us an update on trade negotiations. We had Jameson Greer, the U.S. trade representative here at the Council on Foreign Relations, saying the trade deficit is exploding, in his words. How close are those negotiations as you see them? 00:20:53 Speaker 4: Well, I'm always cautiously optimistic. We continue to have constructive conversations. We continue to have positive engagements. We don't have yet an agreement. Obviously, we're talking about The different 232 tariffs that have been implemented, particularly the car industry and the steel sector, are of worry for Mexico. We continue to talk about what the U.S. describes as non-tariff barriers. I think we've made a lot of progress, and. 00:21:24 Speaker 3: Hopefully we will get to an agreement in the not-so-distant future. 00:21:30 Speaker 13: Likely to see reductions on steel and car tariffs, do you think? 00:21:33 Speaker 3: Well, that's our hope. 00:21:35 Speaker 13: Optimistic still? 00:21:37 Speaker 3: Again, cautiously optimistic. 00:21:40 Speaker 13: You studied at the University of Chicago. Yes, there was political theory with Martha Nussbaum and the like. Also spent a lot of time with David Axelrod. So you understand US politics. Given that, I'm curious how you think about the timeline the US is operating under right now, the administration is operating under with the midterm elections here many weeks away. Do you see that as a forcing mechanism or something that's shaping conversations about trade in particular? 00:22:02 Speaker 4: Well, you know, we try to be very careful about not getting ourselves entangled with U.S. 00:22:09 Speaker 3: Politics. 00:22:10 Speaker 4: What I can tell you is that we're obviously watching the elections like everybody else, and that we will continue to engage with the U.S. before and after, because that is the responsibility of of any government that shares such a big border, that shares so many interests, including the trade that you just mentioned. 00:22:33 Speaker 13: USMCA not renewed with the rubber stamps. These negotiations are ongoing. What would it mean for North America were there to be a deal, say, between Mexico and the United States, but not one with Canada, not one between the U.S. 00:22:43 Speaker 5: And Canada? 00:22:44 Speaker 4: Well, I mean, the framework of the USMCA continues to be trilateral. There are some aspects that will need to be discussed trilaterally. But of course, there are issues that are bilateral. There have always been aspects of the USMCA, previously the NAFTA, that were bilateral in their nature. And it's natural for the countries to have also bilateral engagement and to reach some agreements in that manner. 00:23:08 Speaker 13: A few questions about Asia, if I could. You've been shuttling around New York, but you also went back to Mexico. There was a state visit by South Korea's leadership. How do you assess the prospects of a Mexico-South Korea trade deal? 00:23:20 Speaker 4: Well, I don't think we will get to a free trade agreement. We're looking more at different agreements that show the complementarities between the economies. Of course, the conversations will continue to see. 00:23:35 Speaker 3: Where we end. 00:23:36 Speaker 4: But in the meantime, what we are deepening is our cooperation in several different areas, including science and technology. artificial intelligence, obviously the different investments of the Korean companies that are in Mexico, including also Korean culture. 00:23:53 Speaker 3: K-pop, that is of great interest for a lot of people in Mexico. 00:23:57 Speaker 2: Fourth largest market in the. 00:23:58 Speaker 3: World is Mexico. Fourth largest market for K-pop. 00:24:00 Speaker 4: So we're exploring the opening of a K-pop or K-culture center in Mexico City and the opening of a Mexican culture center in South Korea. 00:24:11 Speaker 2: How about that? 00:24:12 Speaker 3: It's going to be interesting. 00:24:13 Speaker 13: Our focus here so much this week is on the U.S.-China relationship, and I'm curious how Mexico's tack toward China has changed under this administration. 00:24:21 Speaker 4: Well, obviously, we have had throughout the decades a friendly political relation with China. We intend to keep it that way. We have an ongoing dialogue with the Chinese government. We also have, obviously, an interest, as the rest of the world does, looking at the relation between the US and China going in a positive direction. So we expected these conversations to go well, to have positive results. 00:24:55 Speaker 3: And when it comes to trade, I mean, our focus. 00:25:00 Speaker 4: Right now is Plan Mexico, which is centered in bringing back to Mexico supply chains that have left over the years and to fostering greater added value in the supply chains that we already have in Mexico. 00:25:16 Speaker 13: We are days away from an election in Brazil. Were President Lula to lose his bid for re-election, how would that change your country's relationship with Brazil? 00:25:24 Speaker 4: Well, as with the rest of Latin America, we continue to have dialogue with all the governments in the region. We will see what's the result in Brazil. We have an excellent relationship. with the government of President Lula. I was just in Brazil meeting with him and his team. So let's wait and see the result of the election. 00:25:47 Speaker 13: I'll close with a question just about changes in Latin America broadly. We've seen this shift to the right. And I'm curious how that move has shaped your relationship with other countries in the region, how it continues to shape them. 00:25:58 Speaker 4: We're trying to find pragmatic areas of cooperation with the different governments of the region. Of course, not all of us think alike, but we can find areas like public health, science and trade where we can find space to continue working together, even though we are not aligned necessarily politically. 00:26:23 Speaker 3: Very good to speak to you. 00:26:24 Speaker 2: Thank you very much. 00:26:24 Speaker 3: Thank you, David. 00:26:25 Speaker 13: That's the Point of Fair. Secretary of Mexico, Roberto Velasco, joining me here at the United Nations. 00:26:28 Speaker 2: Back to you. David Gurra, thank you so much. That from the United Nations, Rose Garden, overlooking the East River as well. It is Bloomberg money. And what we're trying to do here within the daily Bloomberg grind of sophisticated equity bond currency commodity analysis is find somebody who at Carnegie Mellon Tepper took stochastic calculus for finance, survived Brownian motion, and Bruno DePere's Edo's Lemma, but can talk about personal finance, retirement. 00:26:58 Speaker 1: There's only one guy. 00:27:00 Speaker 2: That can do that. Jeffrey Rosenberg joins us from BlackRock today. How do you simplify this nuts finance world we're in right now? How do you bring it down for mom, dad, your kids? 00:27:13 Speaker 5: Well, the big question, Scarlett and I were talking about this before, you know, bonds had made it into the regular media and people are wondering and What's going on? And is the bond market freaking out? And a very simple way of kind of understanding what's going on in interest rates is interest rates reflect the marginal cost of capital. There's opportunity costs associated with them. And what we're seeing in the market is a reflection of a lot of demands for capital. We have growth that's accelerating. We have capital expenditures from the AI investment that are accelerating. 00:27:48 Speaker 7: We have record debt and deficits. So we have treasury indebtedness. 00:27:52 Speaker 5: All of this on top of our regular amount of corporate bond financing, mortgage-backed security financing, refinancing activity. And so this competition for capital is a big reason why we've seen this step. 00:28:05 Speaker 2: Is it a permanent shift within our personal finance system? Do we adjust? Carlos is too young to remember this, but Jeff, do we have to adjust back to what we knew, a higher interest rate regime? 00:28:15 Speaker 7: Yeah, we do. 00:28:16 Speaker 5: This is a structural change, and I think you really have to sort of associate the structural change with. 00:28:23 Speaker 7: A longer history, right? 00:28:25 Speaker 5: It's not the thing we got used to for a long time, which was zero interest rates and QE. The post-GFC era lasted 10, 15 years, and it gave us very low mortgage rates. It gave us incredible housing price gains. It gave us incredible private equity gains, everything that was fueled by debt. did really well in that zero interest rate environment. And we're clearly out of that zero interest rate environment. It's a higher real interest rate environment. That was the argument before. What's the opportunity cost of capital? And a higher inflation rate environment. 00:28:55 Speaker 2: Let me bring up this morning, my sweet scholar, jump into this with Jeffrey Rosenberg. This is Rick Reeder. He was on a short list to be the chairman. The Federal Reserve System, I believe, still works at BlackRock right now. The next phase markets have benefited from a narrow set of powerful themes. Next phase is likely to require greater precision at how risk is allocated and where opportunities are sourced. 00:29:18 Speaker 1: I look at the yield curve and the five-year yield now gives you 5%. It's only the two-year and the three-year that's below 5%. So it's a good time to be a saver once again. And if you have a traditional pension plan, it's also good. But with higher yields, do we now say, okay, the 60-40 portfolio, oh, that works again. 00:29:36 Speaker 7: So you're really spot on to highlight both sides. 00:29:40 Speaker 3: Of this, right? 00:29:40 Speaker 5: The liability side, the mortgages, that's a little painful. But the opportunity side on the investment side is better. I don't think you can conclude 60-40 is back because there's another whole issue with bonds, which is how do they perform and with equities? 00:29:54 Speaker 7: What's the relationship? 00:29:55 Speaker 5: And that relationship used to be very powerfully diversifying. We had an environment where bonds would reliably go up whenever there was a challenge to equities. That was an environment when we had too little inflation. So that's over. We're five years into too much inflation. When you have too much inflation, bonds aren't really a hedge anymore. They're good for income, as you pointed out, and that's the way to think about them. But for diversification, we're going to have to think about broadening our diversifier set away from just thinking about the traditional 60-40. 00:30:25 Speaker 7: We talk about it 50-30-20. And so what's that 20? 00:30:28 Speaker 5: It's alternatives and different forms of diversification to add into the portfolio mix. 00:30:34 Speaker 2: All right. 00:30:34 Speaker 1: So we look also at the bond sell-off that's taking place in the U.S. And we talk about it like it's the end of the world. Is the bond market freaking out? But it's not. I mean, because this is a global phenomenon. You see this in Japan. You see this in Western Europe. How much should we focus on the US's fiscal problems driving bond yields higher when it feels like every developed country has the same problem? 00:30:56 Speaker 5: Yeah, I would say not overly focus on the fiscal issue. The fiscal issue is real. Interest payments are higher. Debt outstanding is higher. But it's part of a broader story. A simple way to think about that, and I'm glad you brought up the global perspective, Globally, what we've seen is an increase this year in nominal GDP forecasts. My friend, colleague, and mentor Tom Parker points this out, and we'll be writing about this shortly. If you look at global average and GDP, nominal GDP, so what does that mean? It means take the real rate of activity and add the rate of inflation. That's basically like current price level of economic growth. What were the changes this year globally on average? An increase of about 50 basis points, half a percentage point relative to forecasts at the beginning of the year. That matches almost exactly the average global bond increase. So global bond rates, they track nominal activity. So this isn't the bond market freaking out. This is the bond market recognizing. 00:31:53 Speaker 7: That, hey, growth is higher in nominal terms. 00:31:56 Speaker 2: But a huge body of people who aren't sophisticated go, OK, it's roaring. It's a boom. nominal GDP is up. Do you just presume, Jeff, that for the average guy out there, with a retirement plan, the punch bowl ends, the party ends, and nominal GDP comes down and we are harmed in our personal finance? 00:32:17 Speaker 5: Well, OK, so in a shock scenario where nominal GDP comes down, it's coming down because there's disinflation. 00:32:25 Speaker 7: It's coming down because real growth is going on. That's a recession scenario. 00:32:29 Speaker 2: OK, but away from that. 00:32:30 Speaker 5: Away from that, if it comes down to a lower level, depends on whether that's real or inflation. Right now, the hope is. 00:32:36 Speaker 2: What's your bet on that? 00:32:38 Speaker 5: It'll start with inflation. That's the expectation. If and when we stop the geopolitical... transference into inflation from oil prices. If we can get through that, we can see inflation come back down. 2.5%, 2.6% from 3.3%, 3.2%. That will bring nominal GDP down, and that will help to take the edge off of what we've. 00:33:00 Speaker 2: Seen in the industry. You're too young. You're too young. I remember the raging debate over actuarial assumption. My first question of Bloomberg was to Rick Wagoner at Generous Motors about the shift in their pension obligations. Are we so out of whack, Jeffrey Rosenberg, that we're going to have to change our so-called actuarial assumption to a higher regime and that upsets our retirement and upsets our wealth management? 00:33:26 Speaker 3: No. 00:33:26 Speaker 5: I mean, those adjustments are happening in real time. They happen as the rates go higher. And it's asset liability matching. So two things are happening. One, the liability actually goes down when that happens because you're discounting those future payments by a higher interest rate. And two, you're more able to defease, that is, kind of immunize that liability at a higher interest rate environment. The problem on the pension side isn't the 5% interest rates. The problem was the 0% interest rate. That was the problem when we were looking at pension deficits because you were blowing out the liability. 00:33:59 Speaker 7: And you didn't have. 00:34:01 Speaker 5: Income oriented fixed income instruments that could help you to offset that liability. So it's actually a much better environment from that asset line. 00:34:08 Speaker 2: This is where Jenny says and others and John writing and bring capitals. It's the same thing We should celebrate that we're back to a normal yield within. 00:34:17 Speaker 1: Our wealth management Because post-GFC, it was so abnormal for so long. But people think in the short term and people think based on what they know. We know that this White House is not like higher borrowing costs. Scott Besson, the Treasury Secretary, has tried to do a number of things. What's left at his disposal? I mean, if he were to intervene in some way, does government intervention work to lower bond yields? 00:34:37 Speaker 7: Not without a real change in the fundamentals. You can do some things. 00:34:42 Speaker 5: There are some bigger things that can be done, but it requires the Federal Reserve's balance sheet. 00:34:46 Speaker 7: We've seen that, right? 00:34:47 Speaker 5: We've seen the impact of quantitative easing. And you can implement very powerful policies. We've seen those policies happen in our past. where the government decides it wants a certain kind of interest rate. That was the financial repression era. No one is really expecting that kind of thing. But you ask the question, what could be done? But that doesn't necessarily mean you can solve the ultimate problem of how much debt deficits that you have. How you can do that over the long run is by raising nominal GDP relative to your borrowing rate and relative to your. 00:35:21 Speaker 7: Change in your rate of borrowing, which is your deficits. 00:35:24 Speaker 5: Those take real fiscal changes that we haven't really seen the political ability to implement. And so we're going to have to price the anticipation that there's going to be a permanently higher level of debt and deficits that's going to increase the term premium and the cost of financing. 00:35:41 Speaker 2: My takeaway from this is buy the three-year CD. 00:35:44 Speaker 6: Yeah. 00:35:45 Speaker 1: Buy the five-year note. Get your five-year note. 00:35:47 Speaker 2: That used to be the old answer. 00:35:49 Speaker 1: Jeff Rosenberg. Thank you so much. Jeff Rosenberg of BlackRock. Coming up on Bloomberg Money, we've got Barry Ritholtz, chairman and CIO of Ritholtz Wealth Management, talking about how Americans are generating their wealth right now. This is Bloomberg Money. 00:36:05 Speaker 2: Jeffrey, thank you. 00:36:05 Speaker 10: Great, guys. 00:36:06 Speaker 1: Thank you. That was really helpful. 00:36:08 Speaker 2: Hope so. You're listening to Bloomberg Money. Stay with us with more to come after this. Yes, the fish are alive. Somebody emailed me and said, was it a prop and fake fish? 00:36:27 Speaker 1: No, no, they're real. 00:36:28 Speaker 2: They're real. 00:36:29 Speaker 1: There used to be baby sharks in there, too. 00:36:31 Speaker 2: Yeah, the famous Aquaria of Michael Bloomberg. 00:36:34 Speaker 1: Aquaria, because that's plural. 00:36:37 Speaker 2: This is a joy. I need you to focus. There's a guy named Ed Hyman who basically invented market economics with a guy named Alan Greenspan. Ed Hyman is founder of Evercore ISI, one of my heroes. Good morning, Ed. And this is what he says. This is a unique book, maybe the best I've ever read, and I've read a lot. Nothing else needs to be said about Barry Ritholtz, chairman, CIO, entrepreneur, Ritholtz Wealth Management. He has a number of properties, including master's in business on Bloomberg Radio. But he has a spectacular book. I'm not going to bore you with why it's so good. All you need to know. It tells you what not to do. What's the next step for the book? You came out with a beach reading this summer. This book has an oomph to it right now. What's the next thing? 00:37:26 Speaker 6: We'll do something fun with video, finding clever ways to illustrate some of the charts and tables and making them. 00:37:34 Speaker 7: More interesting, more accessible. 00:37:36 Speaker 2: Let's look at it right now. I want to bring this in. This is Ritholtz, just classic Ritholtz here and how not to invest. Tiny errors, epic fails, and everything in between. How to avoid the avoidable errors investors are making in 2026 in September. What are we doing wrong right now? What do we need to avoid? 00:37:56 Speaker 6: So I think people, and it really depends on who you are, where you sit, what your portfolio is like, where you are. People are looking at the bond market and drawing all sorts of interesting extrapolations. There's a little bit of panic, not a whole lot. Oh, my God, what does this mean? 00:38:14 Speaker 3: Is this the war? Is this the tariffs? 00:38:16 Speaker 7: Is this inflation? 00:38:17 Speaker 2: What's going on? 00:38:19 Speaker 6: Some of that certainly is a factor. But when I look at this market and I look at the history of interest rates going back 50, 60 years, this seems to be, after 25 years of ZERP and QE and zero interest rate, seems like we're kind of normalizing. 00:38:36 Speaker 2: You go back to the 80s and 90s, people. 00:38:40 Speaker 6: Recognize that a 7% mortgage was fairly typical. Your prior guest, Jeff Rosenberg, implied we really didn't know how good we had it when rates were zero, mortgages were 3%, and it was free to borrow. And so this means that era is coming to an end and we're shifting our from monetary stimulus to fiscal stimulus. 00:39:05 Speaker 2: Related to the book, don't. 00:39:07 Speaker 6: Panic about this. Recognize it for what it is and look at your portfolio and consider, do you need to make a long-term shift in your equity exposure? If you're looking for tax-free yield, consider munibonds. My New York State munibond portfolio that I'm an investor in, 4.5% tax. 00:39:30 Speaker 2: Yield. 00:39:30 Speaker 6: That's the taxable equivalent of just about 8%. If I would have told someone five years ago, hey, I could get you AA-rated 8% yield. 00:39:43 Speaker 2: Their heads would have exploded. It's been. 00:39:45 Speaker 6: so long before bonds paid you to sit and wait. 00:39:50 Speaker 3: Okay. 00:39:50 Speaker 1: So maximizing your investments, maximizing your savings, that's certainly something everyone wants to do. But before you can get there, you have to have the money to be able to invest in all of that. And you've been looking into how Americans generate their wealth, how Americans create their wealth. And the answer is not by working at a company and getting a W-2. You can do well, but you can't generate a lot of wealth. 00:40:11 Speaker 2: Right. 00:40:12 Speaker 6: The new book, The Everyday Millionaire, The Everywhere Millionaire, talks about, and this is very much all exercise in confirmation bias, talks about how we really misunderstand where wealth comes from in America. We think, and the media focuses obsessively on tech founders and CEOs, but the average wealthy person in America, somewhere around the top 4 or 5%, Most of them don't work for public companies. Most of them aren't tech founders. They tend to be ordinary people running regular businesses that they have ownership of, own, don't earn. And things like dental practices, HVAC, auto dealers, things that you see in your everyday life that you encounter that you probably don't realize are putting these folks in the top 4%, which is about $ 25 million net worth, or somewhere around the top 10%, which is about $ 5 million liquid net worth. 00:41:20 Speaker 2: I can do a Bloomberg Money Audible with Barry Ritholtz. When the Knicks were in the tank... He was their only loyal fan. 00:41:27 Speaker 1: I think there's also someone named Spike Lee, too. 00:41:31 Speaker 2: Spike Lee and Barry Ritholtz as well. I look at a repeat in the NBA, and I'm thinking of Jalen with his small business. Jalen Brunson is building out all of this, you know, the athlete thing and all that. How hard is it to repeat? I mean, they have a target on their back, right? 00:41:49 Speaker 6: Especially in the modern era where it seems that key players move around a little more frequently than they did back in the day. 00:41:56 Speaker 7: That's number one. 00:41:58 Speaker 6: Plus, after you win, everybody says, okay, what do we have to do to get past last year's championship? Look at how all the moves that were made when Golden State Warriors were on their tear. 00:42:12 Speaker 2: The same with the Lakers. 00:42:13 Speaker 6: Everybody kind of rejiggers themselves. 00:42:16 Speaker 2: Are you going to be there opening night? I'm not going. 00:42:17 Speaker 6: To be there opening night, but I will be there about eight seats away from Mike on the floor. 00:42:23 Speaker 2: Yeah, but come on. He's on the long side. 00:42:25 Speaker 6: I'm on the short side. 00:42:26 Speaker 2: Well, OK, that's fine. You know, you didn't you didn't save Mr. Bloomberg when the Nick crashed into him. Where were you? I was watching at home. 00:42:35 Speaker 6: I'm like, oh, he's going to feel that tomorrow. 00:42:38 Speaker 2: Can I just I want to pause here, folks. There's been 422 Bloomberg money wealth books over 40 years. There's a thing called a type one construct and a type two. All you need to know on a Friday afternoon is Barry Ritholtz has the single best type two construct wealth management book. that exists. You can't do this unless you think about the word not. What to avoid, what not to do in investment. It's a jewel. Throw it at your bratty kids and say, shut up and read it. Barry Ritholtz, we look for the movies, DiCaprio playing Ritholtz. I don't think so. Barry Riddles, thank you so much. Riddles Wealth Management here today. We've got much more coming up. A really special site. I think, is Taylor going to appear? 00:43:28 Speaker 3: Is it Tay-Tay? 00:43:29 Speaker 2: I think it's like a Taylor Day, I think. 00:43:32 Speaker 1: It may very well be. Well, Christina Ruffini is going to join us next. We're going to talk a little bit about it. We're going to look ahead to this weekend because there is some new music and new music videos from Ms. Swift, her first since getting married. This is Bloomberg Money. 00:43:48 Speaker 2: You're listening to Bloomberg Money. Stay with us with more to come after this. 00:43:53 Speaker 1: Bloomberg Money. 00:44:01 Speaker 2: Bloomberg Money, Tom King and Scarlett Fu, an eventful day. Thank you for being with us as we did some international relations there. Thank you, David Gurra, as well. I mean, it's Friday. We have to look forward to the weekend. 00:44:12 Speaker 1: Absolutely. And so here to help us look forward to the weekend is Christina Ruffini. She is Bloomberg This Weekend's host. You guys air every Saturday and Sunday, 7 a.m. to 10 a.m. 00:44:22 Speaker 11: We are here. We're doing everything. We're doing a recap of the U.N. 00:44:24 Speaker 12: We're going to look forward towards these Middle East negotiations, what's going on. We're going to talk to you about, we have a fun story about how teeny, teeny, tiny hotels are becoming really popular as people don't want to deal with taking out the trash in their Airbnb, but they want like some hotel services. 00:44:38 Speaker 11: Without being in a behemoth resort. These like micro hotels are peaking in popularity. 00:44:42 Speaker 1: That was the thing in Japan with the capsule hotels. 00:44:44 Speaker 11: So this is not small rooms. This is a small number of rooms, like. 00:44:47 Speaker 12: Three and four rooms at somebody's really fancy villa that they're now letting out and having a super luxury experience. But you also get to be there with some other people. And again, people are moving away from Airbnbs because of all the drama. 00:44:59 Speaker 2: Everything seems to be managed now. including Taylor Swift's latest. I mean, it's an incredibly managed exercise. You're an hour ago. 00:45:06 Speaker 1: Well, anything she does has to be managed because whatever she does has such a big impact. 00:45:10 Speaker 2: I mean, you know, you used to drop a record or drop this or drop that, and that's over. 00:45:15 Speaker 1: Well, she's revealing a video at the MTV VMAs, the Video Music Awards, but everyone just calls it VMAs. I don't even know how you watch the VMAs these days. 00:45:26 Speaker 12: I don't know, but I did see the video is going to have Colin Farrell and Dakota Johnson in it. And, you know, I'm kind of Taylor Swift agnostic, but I do like Colin Farrell. 00:45:35 Speaker 11: I would I would watch him read the phone. 00:45:37 Speaker 1: That's the trailer, by the way. I will watch this video. 00:45:39 Speaker 11: I will watch this video. 00:45:39 Speaker 1: This looks like a movie. 00:45:41 Speaker 2: Patient Zero is the new song. 00:45:43 Speaker 1: Patient Zero is the new song. You have you have Taylor Swift fans in your household. 00:45:46 Speaker 2: I sat up on her food court. I listened to it at full volume on my fancy iPhone. 00:45:50 Speaker 11: What did you think? 00:45:53 Speaker 2: I really like it. I think that what she did during COVID was absolutely brilliant. And, you know, she's grounded out and done it. I'm just waiting for wedding photographs. I mean, you're the celebrity lodestone here. 00:46:03 Speaker 1: You know, what we did get was photographs of people attending the wedding and what they wore. We didn't get any photographs released from her wedding itself. Have you seen any? 00:46:12 Speaker 12: No, and I don't, again, I don't care about the wedding, but I would like to see the fashion. I would like to see the dress. 00:46:17 Speaker 11: I admire that they've managed to keep that Locked down. 00:46:21 Speaker 1: I'm sure many NDAs were signed. 00:46:23 Speaker 11: When has that ever stopped anyone before? 00:46:24 Speaker 2: Or you can bring it over into Bloomberg this weekend. I mean, we can make, you know, it's Taylor extravaganza this weekend. That's all there is to it. 00:46:30 Speaker 7: There it is. 00:46:30 Speaker 11: I think David Gurra is like a low-key Swifty. I know he has. 00:46:33 Speaker 2: Swifty's in his house. 00:46:34 Speaker 7: Gurra's useless. 00:46:35 Speaker 2: David's useless on Taylor Swift. He's waiting for Taylor Swift bluegrass. I mean, he got folklore. 00:46:42 Speaker 11: Was that not close enough? 00:46:43 Speaker 2: No, that was not close enough for David Gurra. 00:46:45 Speaker 6: Okay. 00:46:46 Speaker 2: Christina, thank you. Thank you both. 00:46:48 Speaker 1: Christina Ruffini, of course, be sure to catch Bloomberg this weekend, every Saturday and Sunday morning, starting at 7 a.m. Eastern time. So the VMAs are happening this weekend. Saturday Night Live also begins its new season this weekend. Jalen Brunson is hosting. 00:47:01 Speaker 2: Jalen's hosting at home. I wear Destination television. I've got to straighten my bow tie after an hour of Bloomberg money. Thank you to our team for all of the effort. This is the Bloomberg Money Podcast, bringing you a smart look at the forces shaping your financial life. I'm Tom Keen with Scarlett Fu. You can watch the show live on Bloomberg TV every Friday at noon Wall Street time. Subscribe to the podcast on Apple, Spotify, or wherever you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app.