Bloomberg Money: The Opportunity Cost of Cautious Investing

13:08Nouriel Roubini:How do you respond to the stupid fall down, the ball goes by, oh, I'm miraculously cured?

13:14Amanda Lynam:It's a part of the game in a way that I think is one of the reasons why it's not as big in the U.S.

13:19Nouriel Roubini:I agree.

13:20Amanda Lynam:I think, you know, you have American football here and hockey and all these other sports that are very American and we love it here. And and they're very strong. And we don't like that.

13:31Nouriel Roubini:In your free time, fix it.

13:31Amanda Lynam:At least in hockey, they're actually fighting. They fight each other.

13:35Nouriel Roubini:She drops the gloves. They run. I mean, she's in the corner in the third period. She's frightening. You should see her, folks. The terror of northern New York City. Well, this was lovely. This was fun. This was great. Eric Beltunas, thank you. Vanessa Perdomo, thank you. And Michael Ball, seriously, look for Michael Ball's academics on the Fed all out through the weekend on Bloomberg and other news sources as well. I mean, coming up here, we got, it's going to be interesting. We got Norrell Robini. He's senior economic strategist at Hudson Bay Capital. We've known each other for decades. I want to know what he thinks, like with Ted Lieu the other week, the future of social security.

14:14Amanda Lynam:Yeah, a lot to talk about with Norrell Robini. It's a different Norrell Robini. on Bloomberg Money.

14:18Nouriel Roubini:He's sensitive. Can you get us tickets? That's all I care about.

14:22Amanda Lynam:No, I don't even know if I'll go to the NBA.

14:24Nouriel Roubini:I'll sit where I can see Pennsylvania. Can you get us tickets?

14:28Amanda Lynam:Sit here.

14:29Nouriel Roubini:You're listening to Bloomberg Money. Stay with us with more to come after this.

14:34Amanda Lynam:Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions, buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined.

15:12Amanda Lynam:An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market.

15:29Nouriel Roubini:Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC registered advisor. Complete disclosures available at public.com slash disclosures.

15:43Amanda Lynam:So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise, proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling.

16:24Amanda Lynam:The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients.

16:57Amanda Lynam:And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

17:19Nouriel Roubini:Welcome back. It's Bloomberg Money. Tom Keen alongside Scarlet Fu. Both of us were talking about the smoke and the fire from Duluth. I looked at Duluth, Minnesota today. Just unbelievable. Have you been walking around with a mask on? No, I don't do the mask thing, but the dogs aren't healthy. No, the dogs don't like the walks. At all. We'll see on that as we go through. They stay with Bloomberg, all of our media for the continued coverage of what we're seeing in the smoke. It is not smoke and mirrors with Norrell Rubini. He's senior economic strategist at Hudson Bay Capital. That barely describes his contribution to the Clinton administration, his years of service to New York University and the books that just keep on coming.

18:00Nouriel Roubini:One of them, no beef with getting older. OK, that's fine. And we'll look at that. I want to talk about that in a minute. Nora, welcome to the show. Ted Lieu was on the other day. What's the sweat on Social Security? Do we really have to risk losing a check on Social Security into the 2030s?

18:20Amanda Lynam:Well, we know that the trust fund is going to start running out of money. And therefore, whoever is going to be president after this administration in 2028, he or she will have to figure out together in a bipartisan way what to do about it. You can, how to say, length, the retirement age. You can raise payroll taxes. You can cut benefits. You can do a combination of all those things. But definitely, we have to do something about it.

18:43Nouriel Roubini:It just popped into my puny head. He wasn't picked by a task force for Chairman Walsh. What an oversight. That was. Let's go to Nora Rubini from, I believe it's four years ago. No beef with getting older. In 1960, there were five active workers for every retired and disabled worker in these United States. Well, it's gone to three to one in 2009, headed towards two to one in four years. Instead of moving forward, we have slipped backward out of Fortune magazine in 2022. So the clock is ticking. I mean, we're moving on. Do you get the sense the politicians have any understanding of what's going to happen the first Wednesday of November in 2028 when we got to start really fixing this?

19:27Amanda Lynam:Well, you know, the politicians always kick the gun down the road until something becomes critical. They prefer to avoid it. And as we know, Social Security has been for a long time the third rail of American politics. So we'll have to deal with it like we did a few decades ago by creating commission at that time was run by Alan Greenspan. this time around somebody else and they'll come with sensible ideas. We have to increase retirement age. We have to increase payroll taxes or have the corporates that winners pay for the workers or we'll have to cut some benefits. So any combination of those things is going to have to happen at some point down the line.

20:02Amanda Lynam:Eric Bouchin has just pointed out to me that Senator Tim Kaine, a Democrat from Virginia, and Senator Bill Cassidy, a Republican from Louisiana, have proposed a plan to save Social Security by borrowing a one and a half trillion dollars to invest in the stock market, which would grow over 75 years to pay future benefits. Does that sound like something that could work or is that kind of craziness? Well, there are some ideas in the past about, unquote, privatizing social security. And in countries that have sovereign wealth funds because they're running fiscal surpluses and current account surpluses, they can build up net foreign assets like Norway does, like in the Gulf they do, to create something of a buffer for the future.

20:39Amanda Lynam:The problem with the U.S. is we run a fiscal deficit and a large current account deficit. So if you borrow more to invest in the stock market, yeah, you get that margin. Some returns because the returns on the stock market will be higher than what you pay on that borrowing. But it's a gimmick. At the end of the day, you have to do something else. That's not going to solve the problem. It's one step in one direction, but it's not going to be enough. OK, not the solution. In the meantime, inflation is getting in the way of everyone's best laid plans. You look at price increases in elderly health care, for instance, home health care.

21:08Amanda Lynam:because of immigration curbs, it's outstripping, far outstripping the rise in college tuition. You can see there, although, of course, the absolute cost of each is comparing apples with oranges. Nouriel, are Gen Xers and millennials all going to work until we're 90 years old because we need to pay for six-figure college tuition as well as 24-7 care for our parents? Well, in principle, yes. The problem is going to be that with AI, eventually we're going to have long-term permanent tech unemployment. It's going to happen only slowly, but it's going to happen in the next 20 years. So even if you increase the retirement age, the problem is going to be a large chunk of the population is going to be replaced by AI and robots in the next 20, 25 years.

21:45Amanda Lynam:So increasing retirement age is not going to be a solution. It's true that with higher potential growth, debt ratio tend to fall because it's debt to GDP. So our fiscal condition is not as bad as it would be in a situation where growth is lower. But at some point, we have to do something. But eventually, we need some form of universal basic income for everybody. Well, they work and once they retire. and we're already on the way to that.

22:08Nouriel Roubini:One evening at Davos, you and I sat at a bar, lovely old German bar. There was a public official down, three seats down from us who didn't participate, but listened in. And you framed out 07, 08, 09. Can you use 08, 09 or frankly 2000, 2001 is an analog for this exuberance we have now in the stock market?

22:29Amanda Lynam:Well, I've become more optimist. Of course, there is fraughtiness, there'll be excesses, But I think that this AI revolution is the most important in human history in terms of tech innovation.

22:39Nouriel Roubini:But you just told us we're going to lose all our jobs.

22:41Amanda Lynam:Yeah, but suppose that growth goes from two to four by the end of the decade. Then it's going to be 6 % by 2040 or 10 % by 2050 because we're going to get to AGI. Then we've grown to doubling every five years at 10%. You can tax the winner, redistribute everybody to everybody else and make everybody better off. So that's going to be a factor. We'll have either exposed redistribution that is universal basic income or we'll have it ex ante. Ex ante means some form of socialism. Essentially, the government is going to take over some fraction of the big tech firms as they're already willing to do five, 10 percent of it.

23:14Amanda Lynam:We create the sovereign fund that way and we create the Marxian socialism. We're going already in that direction, effectively. OK, this is a very gloomy picture that you're painting here that that rings true with your Dr. doom kind of no it's not gloomy it's optimist with 10 growth and machines doing all the work we don't need to work do you know all these economic theories inside it now you understand why things happen the way they do as an individual do you manage your finances in a way that aligns with them or is there some element of irrational behavior in how you look at your own finances i'm reasonably rational i've never traded in my life i've never bought any individual security of any sort i invest for the long term i have a diversified portfolio mostly of equities if everything were to go in a severe recession or move some of it into liquid assets and so on.

23:56Amanda Lynam:But I think that most people, they're not sophisticated investors. They should just buy and hold until they retire rather than day trading or Mimi stock or crypto or other stuff that makes them lose money. So you're very much a buy and hold guy. You don't touch it at all. Absolutely. 20 seconds.

24:10Nouriel Roubini:They're in my ear here. Talk crypto. The young want to know about crypto. You and I love crypto so much. 120 to 60. Is it going to 30?

24:18Amanda Lynam:Most likely, yes. Most likely, yes. I mean, really, listen, crypto is not a cryptocurrency. They're not a means of payment. They're not a unit of account. They're not a stable store of value. They're not a single numeraire. So calling them cryptocurrency is actually a misnomer. Whatever they are, they're not really neither an asset or a currency. It's mostly a bubble. It's a Ponzi game for most of them.

24:39Nouriel Roubini:Paul Krugman was scathing this week.

24:40Amanda Lynam:Oh, he's been scathing on a lot of things.

24:42Nouriel Roubini:Krugman was on the edge of Rubini there.

24:43Amanda Lynam:All right. Dr. Noreal Rubini, thank you so much for joining us today.

24:47Nouriel Roubini:Thank you.

24:47Amanda Lynam:He is, of course, Hudson Bay Capital Senior Economic Strategist.

24:51Nouriel Roubini:Joining us now, Amanda Lynam, she's chief credit strategist at Goldman Sachs. And I just want to bring up the chart here for you, Amanda, because you're expert at this. At Bloomberg, we have the total return indices that are just absolutely exquisite off of all the heritage of Lehman and Barclays as well. And the chart of the week is the Lynam chart here. And it's a great moderation, the bond market price up forever, forever, forever. Seven standard deviation move. And we've come back. But come on, we've flatlined over the last five or six years. Does that mean bonds are of value? Or does that mean you're still catching up?

25:27Amanda Lynam:Well, first of all, thank you for having me. Good afternoon. If you looked at that chart, Tom, and maybe you started it at year-end 2021, which is just before the Fed started hiking rates and just before interest rates really started their trend upward, what you would see is that IG bonds are roughly flat. However, high-yield bonds are up over 20%. Leverage loans, floating rate, are up over 30 % over that same time frame. So I think this speaks to the point that we've been emphasizing for a bit and very relevant for your audience as well, is that there's an opportunity cost to being too defensive in this market.

25:57Amanda Lynam:Now, to answer your question on do bonds fit in a portfolio? Absolutely. But they just can't be the only part. And that chart you showed told a great story in terms of what the rise in interest rates has done to pressure bond total returns. But at the same time, equities have enjoyed a pretty meaningful upswing. And so that's the point on diversity.

26:16Nouriel Roubini:I've never asked this question. How long have they been doing this? It's like seven or eight years. I've never asked this question. How much of our 401ks in America are in boring, sleepy, underperforming bonds versus the high-yield magic you just talked about?

26:30Amanda Lynam:I mean, our investors that are managing a lot of these 401ks on behalf of retirees and workers typically will employ pretty diversified portfolios. And then, as you know, there are target date funds that become less risky as you get closer to retirement. In general, that's a pretty good way to be invested. I think there's a difference between saving and investing in this market. And I think one of the big lessons is that being invested over the long term is really what is critical. It's hard to time over the arc of a career for any one rate backdrop or equity market backdrop. So staying invested and in a diversified portfolio is key.

27:07Amanda Lynam:Saving and investing. I like that. When my son was born, my mother-in-law gave him a bond. Today, when kids are born, they have access to a Trump account. Their grandparents can contribute to that. These Trump accounts only invest in stock funds or ETFs. That sends a pretty strong signal about the role of bonds in building a portfolio, a person's financial future, doesn't it? Well, I think it's one part of an overall plan. But from my perspective, when we think about the role of a portfolio and where fixed income kicks in, it's really to provide income later in life that's more regular as opposed to waiting for an equity dividend.

27:44Amanda Lynam:And then importantly, it's to offset periods of equity market weakness like we see today. And so while we've had a pretty meaningful uptrend in equities over the past few years, we've known from cycles that those don't go on in perpetuity. And so ideally, what you would want to have is some fixed rate exposure across the curve, some floating rate exposure. Actually, we've been our portfolio strategy colleagues have been emphasizing the role of real assets and kind of inflation protection and then typical equities. And it all fits together.

28:11Nouriel Roubini:Goldman Sachs fixed incomes recommending gold.

28:13Amanda Lynam:Our portfolio strategists. So our portfolio strategists who take a multi-sector view have basically made the point that, as you alluded to, the 60-40 portfolio isn't as straightforward as it was in the years past. And so given some of the shifts in the market that we actually do have to incorporate things like real assets. In the stock market, individual investors are just as influential now as institutional investors. That's really changed over the last few years. I don't know who the dumb money is anymore versus the smart money. That line is blurred. Does that kind of blurring exist in the fixed income and credit world?

28:43Amanda Lynam:Or will this asset class always be the domain of institutions and professionals? We have we have a wide range of investors in our market. I think the really interesting bifurcation that I've seen in corporate credit over the past couple of years, but definitely recently, has been this bifurcation between investors who are buying bonds for yield versus investors who are buying bonds for spread and total return. And that is the key. And what we have emphasized is if you are allocating to credit right now, you should be buying for income and yield, not because there's material scope for a total return boost from tighter spreads because they're already tight or from lower rates because our rate strategists are expecting rates to be elevated.

29:21Nouriel Roubini:I want bond exposure to a data center in Ohio. Here is Amanda Lynam. She's been burning it up. Zero Hedge is a 30-page article and led with Amanda Lynam of Goldman Sachs. Here it is. a mix of markets will be required. Our equity research colleagues expect the five hyperscalers to invest a combined zillion trillion in AI CapEx to now four years out. It would push hyperscalers weights well above the current market conventions. In our wealth management, are we going to be overwhelmed by this tech CapEx juggernaut?

29:55Amanda Lynam:This is the main debate in the corporate credit market right now. And just for your listeners, that number is 5.8 trillion that our equity colleagues It's not a zillion? It's$5.8 trillion. And I think what a lot of investors do is they will look at the hyperscalers' balance sheets and expect that that will largely be financed with debt and that a lot of that will come through the traditional IG corporate credit market. The point that we've made is that the bond market has issuer concentration constraints to a certain degree. And so the key takeaway there is that we expect a portion of that$5.8 trillion to be funded with debt, a portion of which will come through the traditional bond markets.

30:29Amanda Lynam:But we also see scope for the private infrastructure market to play a role. We see scope for these new project finance JVs to do some of the heavy lifting. Cash flow from operations from the hyperscalers will contribute. We're also expecting equity issuance. Some of the rating agencies have said that.

30:42Nouriel Roubini:So we shouldn't be afraid of this tech madness.

30:45Amanda Lynam:I am not concerned about an access to capital constraint. I just think as we progress through what is a multi-year investment cycle, that there will be more nuanced conversations around which market I should be accessing and at what price. That's largely a 2027-2028 event, we think. I want to take a step back here because you think about the different generations. And Gen Z right now is graduating from college. They're joining the workforce. They're building up savings. They know about meme stocks. They know about crypto. They know about prediction markets. These are all go big or go home kinds of bets.

31:14Amanda Lynam:Is there anything within the fixed income credit space that responds to that impulse? Well, we're subject to risk sentiment like other markets are in terms of when there's a real risk off tone. We feel it in our market. I would say we tend to be a bit more defensive. We actually put a piece out on this earlier this week, my colleague Spencer did, which really emphasized that the credit equity beta has diverged in 2026 in particular, meaning credit hasn't been participating as much on the upside, but it's also been more defensive on risk off tones on the downside. And I think going back to over the arc of a career and investment cycle, just being invested is the key.

31:50Nouriel Roubini:OK, I love that we're doing credit beta. But you're at this weekend at some family event or, you know, friends and Romans and countrymen, and somebody says, should I buy a five-year CD or a three-year CD? America's still stuck in that question of personal finance versus a lot of...

32:07Amanda Lynam:If they had any money to put in a CD to begin with.

32:09Nouriel Roubini:Well, OK, but the arch question is on duration. How short should I be right now?

32:14Amanda Lynam:So we like being more towards the front and intermediate part of the curve. at the longer end of the curve, so 30-year bonds, for example, it tends to be a bit more whippy. If your question is, do we expect the Fed to be kind of cutting or hiking or holding pat from here, our economists are expecting the Fed to essentially be on hold through 2026. I would say the Middle East conflict has been flagged as an upside risk in terms of inflation, which does provide some risk to that view. But in general, we're expecting rates to remain on hold. So You are actually earning some coupon from there as well.

32:51Amanda Lynam:All right. So staying invested is the message here from Amanda Lynam of Goldman Sachs, chief credit strategist. Thank you so much for joining us. All right. Coming up on Bloomberg Money, adult Happy Meals. They're a thing, and they're pulling in customers across tax brackets. More restaurants are trying to lure diners looking for deals. Sometimes the hours are a little bit earlier, you know, verging on early bird special. Plus, we're bullish on books. Tom and I share what we're reading. How did you narrow it down?

33:16Nouriel Roubini:Classic. I narrowed it down to the classic Amanda's Reddit. three times.

33:20Amanda Lynam:That's all coming up on Bloomberg Money. Next up, we'll have you come up with a recommendation too. Jesse Livermore. Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions, buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index.

33:58Amanda Lynam:You approve of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market.

34:25Nouriel Roubini:Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures.

34:39Amanda Lynam:So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling.

35:19Amanda Lynam:The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a health care company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients.

35:53Amanda Lynam:And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

36:35Amanda Lynam:You just went for the toys. Well, there's, you know, some adult Happy Meals now being offered by restaurants, which give you an entree, a side, an adult beverage of your choice for a flat price. And the reason, of course, is inflation. Bloomberg's Sarah Foster writes bundle deals that often include an entree, a side and a drink are up 15 percent from a year earlier across all restaurant segments. And 21 percent at fine dining establishments like the ones you attend. They're the fastest growing entree category on restaurant menus. And Sarah joins us now. So what's an example of a restaurant that Tom might deign to go to, not just the McDonald's?

37:07Amanda Lynam:Well, I was doing a lot of traveling around the city to kind of hunt down these adult happy meals. Oh, I'm sure. I parked at this place called Anne's.

37:14Nouriel Roubini:Red O's said, get out the Amex and let's bring it up.

37:16Amanda Lynam:I will probably be holding off on the red meat for a while. But Anne's on Steak Easy and Greenwich Village, that was this place that I parked at. You know, what really stood out to me is that these are not your fine, you know, value menu eaters. they are going for these fine dining restaurants. A lot of them work in finance. A lot of them work in tech. And they are really drawn to these predictable pricing. You know, you mentioned the toy thing, Tom. What's interesting, I think, is the adult version of this Happy Meal always replaces the toy with a cocktail. I think that's what makes them happy.

37:49Amanda Lynam:But a lot of them really do say, you know, they would be interested in a toy, too, if that adult one would provide it. And these pictures are phenomenal. I think part of this, too, is when you talk to the restauranteurs is they made sure that they wanted it to be really visually appealing so that people can post it to their social media. What was really fascinating is that a lot of these adult happy meals looked luxurious. I was talking with this one restaurant in D.C. They call it the lobby meal. Included in that was a glass of champagne and it was branded with that Vogue, Clicko, you know, champagne branding that was really attracting the people.

38:22Nouriel Roubini:What's fascinating, and I'll do a shout out to Michael's, which is just iconic and also right across the street from our effort here, is it seems to me everybody's simplifying the menus. It just seems to be easier now to order than 12 pages of choices from years ago.

38:39Amanda Lynam:Yeah, it makes things easier for the restaurant themselves because they only offer one or two things, right? There's not a whole lot of things you have to worry about with your supply chain and your suppliers. It's true. It's easier to offer these curated menus because a lot of the diners who I spoke with, they say that they face decision fatigue when they go out to eat these days. Exactly. You know, you see that with line culture, TikTok and social media is just proliferating all of these new restaurants to try. And sometimes people, you know, on a busy day, they just want to have the meal laid out for them.

39:07Amanda Lynam:And some of these deals are hidden too, right? It's not totally advertised. You kind of have to be in the know. It's this layer of prestige and exclusivity. It's like a club that if I spoke with one restaurant that was selling so many adult happy meals that they had to kind of pull it away. And now they still sell it to people who ask for it.

39:25Nouriel Roubini:Stay with us, Sarah. This is the acid test. I want to know if you've read my book. We've got two books here on trading. We had a lot of fun with this. We're doing different things. We did Elon Musk. My bow tie's a mess. Come on, Scar. Tell me when the bow tie's out of line. It's charming. We've got the trading game here. This is Scar Foose's book. Scar, tell us about the trading game.

39:42Amanda Lynam:OK, it's by Gary Stevenson, who is a trader on the FX and rates desk at Citi in London just before and during the financial crisis. He grew up in the wrong part of London, but went to LSE because he was a math whiz. He made a ton of money for Citi and himself, a 400 ,000 pound bonus in his first full year as a trader when he was 23. Right. And he had a thesis driving all his trades, which is that interest rates would stay low and inequality would worsen. What's interesting to me is that later on in the book gets into this. He had a come-to-Jesus moment where he quit the industry, and now he has a YouTube channel teaching people about real-world economics.

40:14Nouriel Roubini:This is great. The iconic math exam at the London School of Economics, that's what Mr. Jagger, who went on to sing— Oh, the one that Nick Jagger. Mr. Jagger went on after he bombed out of the math exam at LSE years ago. It's a rigorous test to say.

40:28Amanda Lynam:I mean, I'm making him sound preachy here, but he's really not, because the book is fun with a lot of descriptions of the characters on trading floors.

40:34Nouriel Roubini:My book is definitive. You read it every five years. if you're in the game. This is a book, Sarah, if you haven't read this book, you're in my timeout chair. Reminiscence of a Stock Operator. This book is 103 years old and there is a lesson about every four pages. There's a point in here with Jesse Livermore. It's so stressful in New York, in Boston, he goes to Florida for vacation and he learns more about trading in Florida from the cotton traders than he does in New York or Boston. This is a classic, classic book. It's criminal that it's not part of a job assignment. What was the last time you read it?

41:12Nouriel Roubini:I read it about three, four years ago, and I'm due to read it again. About right now, I think I'll do that. The annotated version is worth its weight in gold. It's a bigger, almost like coffee table.

41:20Amanda Lynam:Yeah, and it's hardcover, too.

41:22Nouriel Roubini:Hardcover. Well, yeah, we only do hardcover on Bloomberg. Oh, you're such a snob. I'm a terrible snob. Sarah, have you read Jesse Livermore?

41:29Amanda Lynam:I haven't, but I need to.

41:31Nouriel Roubini:That's your assignment. I'm going to tell Nikki Waller. Sarah's deep into Jesse Livermore.

41:35Amanda Lynam:All right. It's Friday. So we need to look ahead to the weekend and next week to get a sense of how you're going to spend your money. And I'm going to focus in on earnings because it's going to be a pretty light week for data. There's not a whole lot going on on that front. And of course, Fed officials are in a blackout period before their meeting. So let's focus on earnings, because on Tuesday, we got General Motors. And Tom, you know that all the big car makers have seemingly given up on hybrids or electric vehicles. They've all put their eggs in the gas guzzling SUV basket.

42:03Nouriel Roubini:Well, they have. And, you know, I look at Alphabet moving on and then the following week into technology. And it's as big a deal as the bank stocks. Oh, for sure.

42:11Amanda Lynam:Alphabet is the first of the hyperscalers to report earnings. And people aren't even calling it earnings season anymore. They're calling it CapEx season because it's all about what they say when it comes to capital expenditures. And it's really going to be a show me moment.

42:23Nouriel Roubini:To me, the big thing here, folks, to get a little nerd on you, is the nominal GDP right now, Now, the animal spirit of the country is basically, you know, like a third world country like China or whatever. Five percent, five point six percent is well. And that's really important. What we do on Bloomberg Money as well is when there's really important breaking news, we're going to stay with that. Scarlett's going to queue it up right now. This on Apple.

42:48Amanda Lynam:This is on Apple. Well, Apple is in early settlement talks with the U.S. Department of Justice over an antitrust suit from 2024 that alleges the iPhone maker violated antitrust laws. According to Bloomberg reporting by Mark Gurman and his colleagues, the discussions are active. There are no guarantees that the two sides will reach an agreement and no trial date has been set in the case. Apple has made multiple offers this year to the DOJ to bring the case to a close. This is according to people familiar with the matter. but the discussions are private and the discussions can end without an agreement being reached.

43:20Nouriel Roubini:The initial tick up here is a nice move up back to 332. Again, I said earlier in the show, Devin, I think we've got that headline, Apple at 341-ish is a$5 trillion company. And what's important here and pulls it back into Bloomberg money is basically who doesn't own Apple. Because within a 401k portfolio, whatever the mix is, it can be something tech dominated where it's four, five, six, eight percent or maybe less or just individual stock ownership. It's part of America.

43:51Amanda Lynam:It's kind of like SpaceX. Even if you didn't want it, you have it because of exposure to, for instance, the Nasdaq 100. So the DOJ's main allegations here are basically about Apple blocking super apps, programs that include many apps within them like WeChat in China. And, you know, Apple with its walled garden business model is something that a lot of people have not necessarily complained about, but brought up as something that works against how it's viewed as a competitive company.

44:19Nouriel Roubini:It's been a permanent fixture of people going after Apple for, as you say nicely, the walled garden. What I would suggest, if you talk to the sell side of any persuasion, the Uber bulls, I think of Gene Munster and Dan Ives and others much more cautious, this app section of the business, the service section just continually grows. Well, they have to.

44:42Amanda Lynam:It has to because the hardware is increasingly a commodity and companies like Apple face increased costs for memory chips.

44:49Nouriel Roubini:Because everyone in my family is doing Apple movies every night. I look at my Visa, Apple this, Apple this, Apple that. And the answer is that subset of Apple is so, so important away from the frenzy over iPhones.

45:02Amanda Lynam:No, that's a really good point. By the way, you mentioned movies on Apple.

45:06Nouriel Roubini:Give me a touch here on Odyssey.

45:08Amanda Lynam:Is it or the Odyssey was released today? so you can go see it. It's the first movie, I believe, that was completely made and designed to be made on the IMAX with IMAX cameras. So this is a big one. Matt Damon plays the main character. Anne Hathaway is part of it. Our producer said the reviews from the UK were, it could have been better, but I'm excited about this.

45:28Nouriel Roubini:I've heard very mixed reviews. I mean, it's not like Moana. I mean, you're the celebrity lodestone. Moana tanked, right?

45:34Amanda Lynam:Ah, the live action movies, like, I don't know that they really catch on. I'm not sure who wants the live action movies aside from the studios. because it allows them to renew the asset.

45:43Nouriel Roubini:But we can summarize with Warner Brothers, with all the merger friends, he had a bang-up year. It's a good year. Is it a good summer for Hollywood? And I think the answer is yes.

45:52Amanda Lynam:It's a good year for Hollywood, yes. It's no longer resting on the laurels of two movies like Barbie or Oppenheimer. It's a lot more than that.

45:59Nouriel Roubini:And the time we've got here, I think this is really important as we've really enjoyed launching the show and giving you perspective here. For me, the major, major thing here is all the marketing of wealth management, all the concepts and mergers. And we're trying to slice through that, try to figure out, OK, what's really going on? I think with Amanda Lina, and we did a nice job of that today to say, OK, what do you do with bonds? And her message was all bonds aren't the same.

46:24Amanda Lynam:Right. And of course, people are scarred from what happened in 2022 when bonds were supposed to be the ballast for your portfolio. The stock market tanked and bonds didn't do it. Okay.

46:34Nouriel Roubini:Luigi, give me an Apple banner here. I just think it's so important. Apple from 280, 280, the end of June. And it's been not a moonshot. That oversees it. But nicely up here at 331, just below the recent record high. And to get on to 341,$5 trillion company is, remember, I mean, you don't remember this. You know, Steve Jobs, John Scully, we're all going to die. Leases of failure. It's a long way from that.

47:02Amanda Lynam:It's a long way from that. And of course, this is a company that has been kind of behind the curve when it comes to AI adoption, too. But maybe that's a little bit of a saving grace right now as we see some pressure on chipmakers and the whole questioning of the AI trade.

47:13Nouriel Roubini:All I know is Mark Gurman has the cool orange iPhone. Does he? I do not.

47:19Amanda Lynam:Of course he does. He's ahead of everyone.

47:22Nouriel Roubini:Thank you so much. It's Bloomberg Money. This is Bloomberg. This is the Bloomberg Money Podcast, bringing you a smart look at the forces shaping your financial life. I'm Tom Keen with Scarlet 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.

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