The Bank of Mom & Dad; College Sports Going Pro & The Return of the Suit

11:26Alicia Levine:Very well said. He's a real deal. So when it comes to these new stadiums and these new school, these new offerings, luxury amenities, Where does the school part of it fit in?

11:35Henry McVey:I mean, because the tuition keeps going up, doesn't it?

11:39Alicia Levine:Yes.

11:40Henry McVey:Well, in some cases that they're they're looking to private equity at the University of Tennessee. They're building this new district that will have hotels, apartments, you name it. And they are the landlord. They own the land and they will be sharing revenue from whatever comes in for those developments. Speaking of sharing revenue, is there a name image likeness for the New York Mets? I knew you were going there. Well, you know, Pete Alonzo. Took the name, image, likeness down to the land of Rubenstein. The 300th home run at Baltimore. And he was here at Citi Field doing it. It was kind of a nice honor for him.

12:17Henry McVey:But, yeah, it's too bad. It's too bad. Have a Tito's and Tang on the way out the door. He'll survive. That's the life of a New York message. Yeah. Janet Lauren, thank you. Thank you so much. Nikki Waller, thank you on your team for great work on personal finance. I don't know what to say to you. You've got like a 24-hour Sunday, don't you? 24-hour Sunday. Big event, as I said, coming up. I'm particularly looking forward to talking to Howard Marks. We're going to talk about AI and the economy. So he'll be our guest on the morning show. Looking forward to that.

12:41Alicia Levine:All right. That's fantastic. That's coming up this weekend on Bloomberg. Now, coming up on Bloomberg Money, we're going to talk investing, regime change with Henry McVeigh. He is partner at KKR. And be sure, as we were just mentioning, to tune in for the Qatari Economic Forum held in New York. Bloomberg will be covering that live on Sunday, including conversations with the IMF Managing Director and City Chair and CEO, Shane Frazier. This is Bloomberg Money.

13:05Henry McVey:You're listening to Bloomberg Money. Stay with us with more to come after this.

13:11Alicia Levine:This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. AI is creating a new path for musical stardom. As Bloomberg's Lucas Shaw and Ashley Carman report, Suno, an AI-generated music company, lets users generate a song in any style based on a text prompt. People can upload their own lyrics or start from scratch, record their own voices, or rely on ones provided by Suno. While most of the songs generated on the service go unheard of by the masses, a few have taken off, including a recent TikTok trend that involves users uploading text messages to Suno and turning them into musical performances, like taking the text from a crazy night out and making it a gospel song.

13:56Alicia Levine:Suno's pitch to investors is that it'll democratize music creation, leading to a more than$5 billion valuation for the company. The music industry, it's watching, as its biggest concern about AI is whether record labels, rights holders, and artists will be compensated for the work they claim built the training models for companies like Suno. Another question? Will these AI bangers have any staying power or just be one-hit wonders? That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro plans.

14:35Alicia Levine: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. 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.

15:14Alicia Levine:technology designed to help doctors spend less time on busy work and more time with their patients. 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.

15:35Henry McVey:This is Alexis Christoffers for Bloomberg Surveillance. AI is everywhere. Outcomes are not. Not because AI doesn't work, but because AI hasn't reached the workflows yet. The campaigns, the launches, the quarterly planning. Those workflows are still run by humans alone. AI is making individuals faster, but it's not making businesses more productive. That's the gap Asana is built to close. Asana is the operating system for human agent teams, your easy button for AI productivity across every team. Ready-to-go AI teammates pre-built for marketing, ops, and IT. No prompt engineering, no setup. They show up where the work is happening, already onboarded in your workflows, ready to deliver.

16:17Henry McVey:And the more they work with your team, the smarter they get. With Asana, your whole company can work on the same plan towards the same goal, whether you're a team of 10 or 10 ,000. Asana, where humans and agents workflow together. Try it at asana.com. That's A-S-A-N-A dot com.

16:38Henry McVey:Bloomberg Money, and we say good afternoon to you. Really the first show back after the summer. Frank, Scarlett, Fu, and Tom Keen. Again, there's a bustle in the city more than to do with a huge event Sunday.

16:51Alicia Levine:Yes, well, the U.N. General Assembly begins this weekend. And of course, we've got a lot of diplomats descending upon the city. It's going to be super busy. Don't try to take a cab across town.

17:01Henry McVey:Across town is worse than going downtown. Here's what we're going to do right now. This is a joy. Henry McFay held court at Morgan Stanley for years to say he's a partner. KKR barely describes his holistic view of our economics, our finance, our investment. So you say, well, what's it got to do with personal finance? What's it got to do with retirement or wealth management? He and his team have put out an absolutely definitive report, history-based, as you'd expect for a guy from University of Virginia as a history major years ago. Let's start with the history of our regime change. What did we used to do that's maybe dated right now?

17:40Henry McVey:So pre-COVID, if you think about it, coming out of the GFC, we had secular stagnation, right? The central banks could not engender inflation in the system. So what would you do? So you'd lower rates, try to increase borrowing, and then that would lead to consumption. When COVID hit, you had a huge amount of fiscal stimulus come in the system. The money multiplier started to work. And we went into what we call a regime change. Bigger deficits. Governments are spending more. Right. More geopolitics. Messy energy transition. And more things that go bump in the net. And into Bloomberg money, a messy bond transition as well.

18:15Henry McVey:I want to go to this one quote. This is a really sophisticated report, folks. get it from KKR. I can't say enough about it right now. And it's simple. Productivity-driven growth and increasing economic choke points for political gains. It reinforces Henry McVeigh's view. We are indeed in a regime change, and it moves to private equity. Why does Scarlett Foo need private equity in her IRA? Well, ultimately, I think if you believe in compounding, which we we think is the eighth wonder of the world. You guys talk about it all the time. That's what private equity does. The second big point is that it actually lends itself to operational improvements and companies making them better.

18:58Henry McVey:So you're not buying beta the market. You're actually buying alpha that's generated by making companies better. We typically own at any time 200 companies. We're using the network of what we're seeing across all those companies to share best practices and to drive growth for our owners. Does Mr. McVeigh know that if there's a third Greek letter mentioned the trap door opens.

19:17Alicia Levine:Oh, yeah. It's a Friday, so we'll let him off easy. What happens in a higher interest rate environment, though, for private equity? Because they've had a hard time being able to exit some of their investments with barring costs elevated, and it's only going to get more elevated.

19:31Henry McVey:Look, I'd say there are a couple of things, which is interest rates is not your only lever, right? Your best thing is how you run the business. There's going to be a vintage of private equity that came through 2021. And you see this in some of the software deals where you paid high prices, that will be a little bit of a bump in the night. But that's ultimately why you need to diversify where you invest. And ultimately, I think we have not been seeing that. And I know this catches the media's attention all the time. But if you look at our exits and we're publicly traded, you can see we've had pretty substantial exits of late.

20:03Alicia Levine:What's the most common mistake or misunderstanding that individual investors have when they allocate to private markets? Because this idea of getting some private assets into your portfolio is kind of new for individuals.

20:14Henry McVey:Kind of new. Revolutionary. It's to be long term. Private equity is predicated on an illiquidity premium.

20:22Alicia Levine:What is long term five years, 10 years?

20:24Henry McVey:Somewhere between five and 10 years. If you're coming in and you need the money in six months, this is the heart of the matter. Good morning, Blackstone. Love you. Good morning. Is there any other companies besides Blackstone or BlackRock? The heart of the matter, Henry, is this liquidity issue? Do we need to set up sensible guardrails within ERISA programs, retirement programs, to make it efficacious to wait five years to get that gross up from private equity? I was around when we actually introduced the 401ks into the public markets in the 1990s when we took a lot of these asset managers public.

20:58Henry McVey:If you think about somebody who's 35, they're going to be in the workforce for 25 to 30 years. Taking some small proportion of your savings and having that compound over time where you don't have a threat of illiquidity, that is, in my opinion... Totally agree. Have you seen evidence that people will be adults and do that, or do they sell or ask to sell on the first dress? I think a lot of this gets to investor education, which is what's the right vehicle, where are you, what is your long-term goal, and ultimately, what's the best vehicle for getting you there?

21:33Alicia Levine:Henry, Tom talked about your regime change framework, and that goes back to the end of COVID. I think 2022 is when you really started talking about it. But a lot has changed since 2022, right? NVIDIA kicked off the AI boom. You have the return of a new president or old president, Trump, and his many policies, which have proven to be inflationary, whether it's tariffs, the war, or immigration, or the one big, beautiful bill. So how do you fold those developments into this framework?

21:59Henry McVey:Yeah. So a couple of things I'd say. At the heart of what we're talking about is that stocks and bonds are now positively correlated. So if you think about Liberation day, what happened? The dollar went down, bonds sold off, and stocks sold off. For the prior 20 years, you had, when stocks sold off, bonds rallied. And that's how you diversified yourself. Our view is that is a more sustainable trend. What's happened, I would say probably geopolitics has accelerated. That was one of our key foundations. The second is the deficits have accelerated. We have not left the call that you're in this higher resting heart rate for inflation.

22:33Henry McVey:And so if you think about what KKR has done, more operational improvement in private equity, more real assets in the portfolio, and then credit be up in the capital structure where you're not stuck in just a fixed investment. In your brilliant regime change report, there's a chart of the Sharpe ratio. William Sharpe, Stanford, X beta. You learn three risk with the CFA three. Sharpe, Traynor, Jensen. Let's go to the very Sharpe ratio with Henry McVeigh. It's irrefutable with private equity. you pick up an efficacious sharp ratio that will benefit someone in wealth management. Why the struggle now?

23:10Henry McVey:In terms of in terms of selling it to the public. Yeah. Look, I think when you look at I mean, I don't think that anybody at KKR, I think we think that it should go into the wealth business, individual investor business, but it doesn't have to be accomplished overnight. Again, I get back to we want to be thoughtful stewards. We want to think about education. But when you think about long-term retirement savings, that's the business KKR is in. We're in the retirement security business. And if you can extend that beyond just pensions and sovereign wealth funds and family offices, it makes sense for individuals to have some portion of their portfolio in that.

23:45Henry McVey:But I don't think you want to do this irresponsibly. And I think where you've seen this, go back to Janice in the 1999s, like taking way too much money in way too quickly. It's hard. That happened in the dot-com era. Everybody learned a lesson. We've seen that in different areas. And so just slow and steady wins the race. This is our 50th year at KKR. This is you know, this isn't our first radio. Like we we've been around and I think, you know, our founders. Ultimately, you've got to have a long term focus. It's too much. Janice, he's throwing massive shade on Denver. But ultimately, concentration, like all the things that apply to the public markets, apply to the private markets, which is, you know, have linear deployment.

24:23Henry McVey:Think about concentration. Think about leverage.

24:25Alicia Levine:What would surprise people about your personal investment strategy?

24:28Henry McVey:So, I mean, obviously, with all the guardrails that I serve as the KKR, CIO, the balance sheet, look, what I would extrapolate is we do a lot in Asia, particularly in Japan. And I think there's a lot going on in Japan and Korea around corporate reform. Most investors, I think when they look at their individual accounts, they're highly concentrated in the U.S. So that would be one thing that I would keep in mind. The second is when I think about what's going on in the infrastructure around the world. That's something that we think is a big theme where the public sector is having to hand that off to the private sector.

25:00Henry McVey:So that's been a big part of what we're doing at KKR. And then I think we hit on this earlier. I'm much more inclined in stocks over bonds. If we're in this higher resting heart rate for inflation, I probably will be trimming down my government bond holdings.

25:14Alicia Levine:And to how small, like what portion specifically on that?

25:20Henry McVey:But to me, equities are a great inflation hedge. And a lot of what we're doing on the private side is doing that, but also in a way that you're improving the outlook for the company.

25:29Alicia Levine:How about housing? How about property and real assets?

25:31Henry McVey:I mean, look, I think every, you know, the American dream, in my view, is changing, which is, I think, you know, homeownership is important. But I also think having employee ownership is important. And we've been doing that at KKR through our program. So I think that's an important part of the story.

25:47Alicia Levine:Thank you, Henry. I really appreciate it. Henry McVeigh, partner at KKR. Coming up next, Alicia Levine over at BNY Wealth. This is Bloomberg Money.

25:58Henry McVey:You're listening to Bloomberg Money. Stay with us with more to come after this.

26:04Alicia Levine:This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. AI is creating a new path for musical stardom. As Bloomberg's Lucas Shaw and Ashley Carmen Report, Suno, an AI-generated music company, lets users generate a song in any style based on a text prompt. People can upload their own lyrics or start from scratch, record their own voices, or rely on ones provided by Suno. While most of the songs generated on the service go unheard of by the masses, a few have taken off, including a recent TikTok trend that involves users uploading text messages to Suno and turning them into musical performances, like taking the text from a crazy night out and making it a gospel song.

26:48Alicia Levine:Suno's pitch to investors is that it'll democratize music creation, leading to a more than$5 billion valuation for the company. The music industry, it's watching, as its biggest concern about AI is whether record labels, rights holders, and artists will be compensated for the work they claim built the training models for companies like Suno. Another question, will these AI bangers have any staying power or just be one-hit wonders? That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro plans.

27:28Alicia Levine: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. 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.

28:06Alicia Levine:technology designed to help doctors spend less time on busy work and more time with their patients. 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.

28:27Henry McVey:This is Alexis Christoffers for Bloomberg Surveillance. AI is everywhere. Outcomes are not. Not because AI doesn't work, but because AI hasn't reached the workflows yet. The campaigns, the launches, the quarterly planning. Those workflows are still run by humans alone. AI is making individuals faster, but it's not making businesses more productive. That's the gap Asana is built to close. Asana is the operating system for human agent teams, your easy button for AI productivity across every team. Ready-to-go AI teammates pre-built for marketing, ops, and IT. No prompt engineering, no setup. They show up where the work is happening, already onboarded in your workflows, ready to deliver.

29:10Henry McVey:And the more they work with your team, the smarter they get. With Asana, your whole company can work on the same plan towards the same goal, whether you're a team of 10 or 10 ,000. Asana, where humans and agents workflow together. Try it at asana.com. That's A-S-A-N-A dot com.

29:32Henry McVey:Welcome back. Bluebird Money on an afternoon, a Friday. Busy into the week we will go, into the weekend as well. Scarlet Fu and Tom Keene. I'm sort of exhausted by the week. I know. It's been a lot. There's been a lot.

29:44Alicia Levine:The AI panic, the Fed rate hike. The Fed meeting. Yeah. And we've turned things around since that Fed meeting. We had recovery on Thursday, and now we're back to being down again. You look at stocks on Friday, and all arrows lower. Red Arrows with all the industry groups down on the day. We do. Can't get away from it, Tom.

30:04Henry McVey:What's the VIX doing right now? 15. That's a bull market VIX. I mean, that's unbelievable. I thought we'd have a VIX at 22 where it's coming to an end.

30:13Alicia Levine:And even that with a 5 % yield on the 10-year.

30:15Henry McVey:You would think so. And whether oil was 109 a barrel. How about a cross asset data check? We look at equity, bonds, currencies, commodities. You do that. Alicia Levine coming up. That's the way she rolls. Oil the story. 107, 109 earlier comes back a little bit during the week. But to me, and we don't have to talk about on Bloomberg Money, but the dollar strength this week is really a back story.

30:36Alicia Levine:Yeah, it might be a good time to go traveling if you can afford it. All right, Bloomberg Money is your new destination for personal finance. It's a cross-platform effort that extends beyond your television screen and includes our new digital hub at Bloomberg.com slash money. And Tom, one of the most widely read stories on Bloomberg this week and on our website is the cutthroat competition to get an entry-level job on Wall Street. You have college freshmen competing for spots in student-run finance and investing clubs that then feed into recruiting opportunities at some of these banks. Some students are seeking coaching services that could cost thousands or tens of thousands of dollars.

31:09Alicia Levine:Bloomberg Finance Editor Dan Tao is here to break down the story. And Dan, I mean, these jobs have always been competitive, but we have entered a new era.

31:17Henry McVey:Yep, that's right. Yeah. I mean, the banks want the best recruits and they want them as early as possible. So students have to prepare a lot earlier than they used to, starting like freshman year, basically.

31:29Alicia Levine:Which is crazy. And the acceptance rate for some of these jobs is lower than to get into Harvard, right? It's like 0.01%. Talk a little bit about these student-run finance club and investing clubs, because we talk to folks who are doing them, and it's competitive to get into those.

31:43Henry McVey:Correct. Yeah, it's harder to get into those clubs than to get into the school in the first place. And part of the reason is because they learn the skills at those clubs, they help them get the internships and then help them get the jobs. So, you know, some of the things they learn are like how to read balance sheets, how to look at cash flow statements, how to value deals, and also how to, you know. Yeah, this is brilliant. The difference here is these kids are really Bloomberg Terminal helping. I'm talking in our book. Bloomberg Terminal helping out. These kids are looking at the four accounting statements.

32:11Henry McVey:I was looking at the back of the beer can to see if the beer was made in Canada or the U.S. right now. Are these kids too smart? Is that why it's too competitive? Well, I mean, the kids are smart. I mean, the kids in these clubs who get into them are obviously top to top. But, you know, it's also, you know, the job market is competitive these days. And, you know, if you're preparing for a field that they, you know, you know, have jobs, coding is not what it used to be in the age of AI. So if you want a finance job and you know it's going to be like less than 1 % chance, you'll get an acceptance at J.P.

32:42Henry McVey:Morgan or Goldman Sachs.

32:43Alicia Levine:Yeah.

32:44Henry McVey:You have to prepare.

32:44Alicia Levine:You have to prepare. And, you know, these jobs pay well in a time when it's hard to just get a paying job. Bloomberg Finance Editor Dan Taub, thank you so much.

32:52Henry McVey:Right now, this is a joy. She was at Brown University. She's doing okay. So she got her fourth, fifth, sixth internship, and then she wandered over to Chicago and did brilliant mathematics. Alicia Levine owns a high ground on linking mathematics into all that we do within our personal finance, our retirement, our wealth management, holding court as chief investment officer at BNY Wealth. What's the biggest mistake you see in the day-to-day grind at BNY that people are doing on their retirement? I think the biggest mistake that we see, like we're in the wealth business, is wanting to trade the allocations or wanting to swap out all the time because of headlines and essentially trying to pretend that building wealth is the same thing as being a hedge fund manager.

33:41Henry McVey:That is the biggest mistake that we see. And that is one of our messages that we always talk about, which is wealth is built over decades. And that trading actually gives you worse returns than if you did the hypothetical experiment. Right. And you missed the five best days of the year, the 10 best days of the year. You underperformed by 5 % annualized going forward over the next 20 years. Do you blame Scarlett Foo in the media? Whoa. No, I don't blame the media because there are plenty of businesses out there that are hedge funds, that are trading, that are using derivatives, trying to hedge some near term risk.

34:20Henry McVey:But the wealth building wealth is very, very different. And building a future where you feel confident is very different than trading. And it's not day trading and it's not even annual trading. And I think that's the biggest business because we hear scary stories. We hear tariffs. We hear war. We hear oil at one hundred and five. And you feel you need to respond. And you feel like you have to get out. You have to do this. And in the end, those typically 100 % of the time tend to be mistakes. And look at 2008. That was a mistake as well. When the market started rallying, it was like a rocket to the upside.

34:52Alicia Levine:So I feel like I think about the investment products that do really well, that get a lot of inflows. And you can talk about buffer ETFs. You can talk about these equity income ETFs using derivatives to generate high yields. Is there a place for that kind of strategy, that kind of thinking, that kind of approach in your retirement account at all? So there is a place for that. But I think

35:10Henry McVey:it's really I think you just go back to the simple thing, which is what are you trying to do? You're trying to grow your capital. End of sentence. So there's a really easy way to grow capital, and that's equities. And that's being fully diversified globally and all sizes. And you let it run. And the question you have to ask yourself is, when am I retiring? What's my when do I think I'm retiring and when do I have to start transitioning towards protecting those gains or something more conservative. But if you're in the growth phase, it's pretty simple. Alicia Levine with us writing 24-7. Let's look at the latest note here.

35:46Henry McVey:As we can, the earnings in CapEx backdrop, well, it remains much stronger than in prior tightening cycles. That's why Alicia Levine seeing resilience, inflation sensitive assets deserve attention. Is a general statement at BNY, are people too afraid? Are they too much in cash, too much in bills, notes and bonds of lesser duration instead of not the cliche of owning NVIDIA, but just being in the market? So I'd say people have been worried really since 2020, right? People are just worried a lot because it's been a very noisy period. A lot of geopolitical events. We see the fracturing of the world trade system and we see the building of the$40 trillion.

36:27Henry McVey:Again, these are the headlines. I'd say people are worried all the time. I wouldn't say that there's a lot of cash out there because the cash tends to be pretty steady. We talk about what's a money market account. That's not going to change. Yeah, but as a percent of the S &P, it's smaller than it was 15 years ago, even though the absolute number is higher. We talk about the absolute number, but as a percentage of the S &P, it's actually smaller. I think the issue is that there's more conversation about why you should not be trying to trade this, why you should not be going to cash over time. And one down year in the market does not make it a reason to get out of the market because we all know that there are downturns in markets.

37:09Alicia Levine:And that's that's fairly normal. Well, speaking of scary headlines, the 40 trillion dollars in national debt that we have out there, that this idea has been prominent for decades, but even the experts are now talking about it with this new level of urgency that we haven't heard before. We've, of course, yet to see a policy response, and it's going to take a lot of pain from either side. So that's why we probably haven't seen anything. But is this idea of all this debt actionable for individual investors, especially when it comes to people's exposure to treasuries or to municipal bonds?

37:40Henry McVey:So I'd say the actual number, in a sense, is part of the growing story of the growing debt. Like I feel every few years we have a panic. It's a big number. It's a round number. It's a zero number. It's a five number like birthdays and tends to get people's attention. I'd say for now, what we're doing in our client portfolios is really being in the belly of the curve, intermediate, intermediate to short term duration, five to 10 year. I think there's risk any longer duration here. There is concern that I think the Fed hiking right now into what is the inflation that's being caused by the increase in oil prices may not be that effective, actually.

38:20Henry McVey:And so what kind of inflation hedge can we have in portfolios? And that's what we're doing in portfolios here. So it's not just like short and intermediate bonds, but also looking at real assets and infrastructure. You just had a previous conversation about that as well, because we think we're just in a higher inflationary world since since covid. The reshoring, the friend shoring, the nationalizing of businesses for critical industries, whether it's pharmaceuticals or whether it's manufacturing capacity. That's all coming back to home countries. It's happening in Europe as well. And that is inflationary.

38:57Henry McVey:And there is no central bank that's going to hike high enough to squeeze it out to get to two. Yeah. So trust it. Yeah. I'm going to do it. Can I do a Bloomberg Money Audible? Do it. You can do this with Alicia Levine. I think of everyone I know in the game and there's a few others. I think of Anna Wong out of Chicago as well with Bloomberg. You have prodigious math abilities to move, you know, folks to get fancy about it, to move not in the X, Y space, but to move almost three-dimensionally through this act is profound. And you do it every day. Alicia, when did math happen for you? Math in girls is a really, really delicate thing.

39:36Henry McVey:Not in my world. Math in girls. Love that answer. What was the catalyst that got Alicia Levine math? Go. Okay. So, let me say it. It was arithmetic, and that was early. And that was like second nature. and I've never thought about arithmetic. It just happened. And that was first or second grade. And then we had a public school system, New York City public schools, second grade in Queens. Our teacher decided that we all should be doing fourth and fifth grade math and she taught it in second grade. And nobody ever complained and no one ever said girls couldn't do it. And my cohort, girls were doing math and there was no conversation around it.

40:19Alicia Levine:We just did it. How hard is it gonna be to be a math major and be able to find jobs in the age of AI? That's an interesting question. I think it's not just math.

40:27Henry McVey:I think it's a lot of it. I think you're best up with a math major right now over many other majors because the ability to think critically and to reframe a question in a different way is very much a mathematical way of thinking, right? Like if I change this variable, if I change this input, I'm going to get a different output. That's what math teaches you to do. It teaches you to think. You've been great about the bond market really not giving us total return over X number of years. And yet it's still bonds, bonds, bonds. Are you lesser bonds now? So we are technically underweight bonds given our benchmark allocation.

41:06Henry McVey:But we do have an allocation to emerging market debt. And we do have an allocation to high yield, which has been very additive. It's been the core bond portfolio that's been more challenged than the EM debt or the high yield. So we do like fixed income. We're just not focused on, you know, the treasuries or see it playing a different role. We see it playing a different role because we if we're going to be in fixed income, we want to know why we're there. So we have all kinds of clients or someone to keep me rich, the preservation or I want less risk in my portfolio. And there are ways of doing that.

41:38Henry McVey:And so we do different parts of the fixed income market. So we still like fixed income. It's just not as heavily weighted. And again, it's really where you are in your life cycle. You know, are you in the growth phase or are you in the consolidation? And I want to keep what I have. And then we have to allocate differently for that. We're going to work from home. I got 30 seconds. Where are you? Are you know, is BNY saying let's go six days in the office? We're back in the office. You're back in the office. It's not even a question. Are the men wearing suits? No, they're not wearing suits. We're not there yet.

42:08Henry McVey:They're wearing like Damien Sassauer. You know, they got the they're super casual into the office.

42:12Alicia Levine:And then when they go out at night, that's when they wear their suit. Great.

42:15Henry McVey:Alicia Levine on the cutting edge. She says suits. Thank you so much. With BNY Wealth Chief Investment Officer Alicia Levine. That's what we're going to talk about here. Scarlett demanded that the well-coiffed in suits, not always bow ties.

42:29Alicia Levine:No. I'm going to talk about suits. Bow ties are back in. Suits are back in for sure. Tailored suits. Tailored suits. Yeah. And sometimes wide-legged pants, which I'm not sure I'm into. The Emmys, they didn't look good on some of the people who wore them there.

42:41Henry McVey:Why did I know you watched it? Should I watch Willow Bay, the show? Widows Bay? Willow Bay. Yeah, I call it Willow Bay. Good morning, Mr. Iger.

42:49Alicia Levine:Do you like horror? Do you like comedy? It's kind of a mixture of both.

42:52Henry McVey:I don't know. I may watch Widow Bay. Widow Bay? Willow Bay? Widow Bay.

42:59Henry McVey:You're listening to Bloomberg Money. Stay with us with more to come after this.

43:08Alicia Levine:This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. AI is creating a new path for musical stardom. As Bloomberg's Lucas Shaw and Ashley Carman report, Suno, an AI-generated music company, lets users generate a song in any style based on a text prompt. People can upload their own lyrics or start from scratch, record their own voices, or rely on ones provided by Suno. While most of the songs generated on the service go unheard of by the masses, a few have taken off, including a recent TikTok trend that involves users uploading text messages to Suno and turning them into musical performances, like taking the text from a crazy night out and making it a gospel song.

43:53Alicia Levine:Suno's pitch to investors is that it'll democratize music creation, leading to a more than$5 billion valuation for the company. The music industry, it's watching, as its biggest concern about AI is whether record labels, rights holders, and artists will be compensated for the work they claim built the training models for companies like Suno. Another question? Will these AI bangers have any staying power or just be one-hit wonders? That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com today by selecting Work Mode, available on Plus and Pro plans.

44:33Alicia Levine: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. 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.

45:11Alicia Levine:Technology designed to help doctors spend less time on busy work and more time with their patients. 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.

45:32Henry McVey:This is Alexis Christoffers for Bloomberg Surveillance. AI is everywhere. Outcomes are not. Not because AI doesn't work, but because AI hasn't reached the workflows yet. The campaigns, the launches, the quarterly planning. Those workflows are still run by humans alone. AI is making individuals faster, but it's not making businesses more productive. That's the gap Asana is built to close. Asana is the operating system for human agent teams, your easy button for AI productivity across every team. Ready-to-go AI teammates pre-built for marketing, ops, and IT. No prompt engineering, no setup. They show up where the work is happening, already onboarded in your workflows, ready to deliver.

46:14Henry McVey:And the more they work with your team, the smarter they get. With Asana, your whole company can work on the same plan towards the same goal, whether you're a team of 10 or 10 ,000. Asana, where humans and agents workflow together. Try it at asana.com. That's A-S-A-N-A dot com.

46:38Alicia Levine:Here in New York, we've all returned to the office. Dress codes, though, are more relaxed than ever across industries, not just on Wall Street. Chris Rauser, Bloomberg's editor for Global Luxury Coverage, sees a new trend emerging. He writes, the pandemic seemed as if it finally marked the death knell of the suit. And yet something improbable has started happening in recent years. The suit is making a comeback. Chris joins us now to discuss, and he's in his suit as well as his bow tie. Yes. Great to have you here, Chris. What are you laughing at?

47:07Henry McVey:I did. I asked Scarlett for permission to wear the bow tie on. You didn't ask me. That's wonderful. That's why it's funny. Is it tie-tie or is it fake-o-tie? Tie-tie. I went to boarding school. Come on.

47:18Alicia Levine:You know, you think about the companies that benefit from the return of suits. Taylor Brands, which owns Men's Warehouse and Joseph A. Bank, they filed for an IPO. Like, this is a real thing.

47:26Henry McVey:They went bankrupt in 2020. And Brooks Brothers also went bankrupt. And they, you know, that was, the pandemic should have been an extinction-level event for suiting, for Taylor, especially mass suiting, because we don't, people came back to the office and don't, and didn't dress up anymore. I used to wear a lot of suits to this office, and then I sort of stopped after, you know, a few years after the pandemic. And then when people started going to weddings again and people started having events, they started buying suits again. People lost a lot of weight because of GLP-1 and had different shapes and sizes.

47:59Henry McVey:And then a funny thing happened in the past few years where after that boom of, like, people coming back and having to buy suits because weddings were happening again, people stopped having to wear suits, have to wear suits to work and stuff, and they started wearing suits for fun. So now the thing that's really hopping at Brooks Brothers, for example, is fashion suiting. It's fun suits with fun colors and textures, and same thing at Men's Warehouse and all these other smaller independent brands.

48:23Alicia Levine:And you went to visit a Japanese suit maker who comes to New York twice a year to take orders. And the getting-to-know-you process between tailor and customer was really fascinating because it wasn't like, where do you work, what kind of office is it? Oh, yeah. It was about, like, what's your interest?

48:36Henry McVey:This is amazing. Yeah, right when I started reporting this story, I went to the Armory, which is a wonderful menswear shop on the Upper East Side. And this tailor, Taylor Cade, Yamamoto-san, comes from Tokyo twice a year, doesn't speak English. And he comes and he has these total fans that come and they do orders with him and working through interpreters. He talks to them about what they like, how they live. Do you like 70s rock and roll? Do you like sailing? And so all these people, I talked to like a guy who owns a saxophone shop in Boston. I talked to a guy who is an engineer at Google who wears three piece suits to work at Google where everyone's wearing T-shirts.

49:11Henry McVey:Like there are people who once. Yeah. Once they figured out that suits can express you and something about you, it doesn't have to be this. I miss all the time on this. So this is Ralph Fitzgerald, which is the same act like a lot of people are into it. I won't bore people with the huge success he's having right now. But the answer is he says this is all about America. He's from England. He cut cloth for Huntsman years ago. And he moved to New York just because this is where the return of the suit is. Yeah, you're seeing a lot of new tailor shops here. You're seeing a lot of tailors from London move their cutters here.

49:45Henry McVey:Dunhill's opening up a shop for the first time here coming up later this year. So I think it really is American. We've got to bring it up. With Chris, folks, now we can only do this because I don't have a clue what I'm talking about. Oh, my gosh. Should I be wearing white sneakers with my beautiful Fitzgerald suit? I mean, this is like the new thing. I see it on TV like in Washington. It's not working for me, Chris. Is it working for you? I do it sometimes, I got to say, because I have bad feet. So I do sometimes wear a sneaker for orthopedic reasons. Roger Federer can get away with it. He's the only guy in the world to get away with it.

50:19Henry McVey:It's a very Silicon Valley thing, too, right, to wear a white sneaker. They don't dress well. I'm sorry. Yeah, well, fair enough. I think a lot of people are doing it. I don't know that you need to do it. I think you probably look better with a dress shoe.

50:30Alicia Levine:Or his Doc Martens. That's what you wear with your suits.

50:32Henry McVey:I have a bunch of things. But yeah, I think Doc Martens, they're doing some different things. The ones I wear are built in their English factory, like the original factory. Yep. And all that. What's a suit cost? It really varies. You know, at Bloomingdale's where they saw the suits go down and then come up again. It was like a wild ride, the men's guys sat there. You can get a suit for like$500,$600 from Hugo Boss and some of their entry-level stuff. and they have all the way up to like$7 ,000 at Xenia. Okay, we're gonna do some books here right now. Right now, I had to go to Alan Flusser. I mean, he dressed Michael Douglas for Gordon Gekko.

51:05Alicia Levine:Oh, really?

51:06Henry McVey:I mean, he's like absolutely definitive into the age. This was the Bible. There was all these like dressed for success stuff. I see you get the preppy thing from years ago. This is the book that changed the debate in America, said subdued colors, look like an adult, act like, you know, and there's different people. Mike Bloomberg gets his suits made in Brooklyn, Only one place Mike Bloomberg will go. Is it Martin Greenfield? Does he go to Martin Greenfield? That's where this suit is from. Oh, that's very good. No wonder you got a raise this year, and I didn't. That's good, guys. But there's my book, Alan Flesser.

51:36Henry McVey:It's the Bible. It's still apt today.

51:38Alicia Levine:What about your book? What did you bring for us?

51:39Henry McVey:I brought the Preppy Handbook. Preppy is having a real big moment in America and internationally, Spain, Japan. And this is the original Bible here.

51:48Alicia Levine:Which was meant to be tongue-in-cheek.

51:49Henry McVey:I mean, it is tongue-in-cheek, but it's hilarious. And then after you and I talked before this show, I brought Take Ivy, which is... This is the guy that you talked about. Yes, this is a photographer who went to, a Japanese photographer who went to the Ivy League in the 60s and took all these photographs of American Ivy style and brought them back to Japan and started the whole wave of just obsession with that.

52:07Alicia Levine:And it led to the creation of Uniqlo and the look that we have there. So there's a legacy. Oh no, it's great. There's a good podcast on all this. It's Articles of Interest by Avery Truffleman, so you should listen to that. Anyway, Chris, thank you so much. Thank you guys. Chris Rauser on The Return, The Comeback of Suits. He, of course, heads up our pursuits coverage, our global luxury coverage. And for the latest recommendations and recommendations from Bloomberg, subscribe to the On Books newsletter.

52:32Henry McVey:Good afternoon, everyone. Bloomberg Money on a Friday in New York, the bustle of New York City. Lisa Matteo, of course, will be with Bloomberg this weekend, the UN meetings and all that. You can't, as you said, crosstown traffic. Don't go across. Literally, you need three cars. Yeah, you have to walk the whole time. Or well, the Plaza Hotel on Sunday. Life is tough.

52:49Alicia Levine:Life is tough for some people, but Lisa gets to report from there because the Qatari Economic Forum is taking place. And that's where Bloomberg this weekend will be. Yes. QEF, we're going to be there on Sunday. And just the magnificence of it.

53:01Henry McVey:I mean, the history behind it as well. A lot going on. You have QEF, you have UNGA going on. The city is just pumping the restaurants, the hotels, everything. But the plaza itself, the history behind it, if you would like, just curious about the royal suite. It'll cost you anywhere from$38 ,000 to$50 ,000 a night. You get a lot for that. I'm sure it's booked all week. You get a lot. You get about three bedrooms. You get a private elevator. You get 24-hour butler service. A number of bathrooms, too, to accommodate. A dining room that seats 12 in case you want to have a whole big group there. A chef's kitchen.

53:37Henry McVey:A private gym, it has, too, in itself. It's part of the room. Yes, and a library as well. Overlooks Fifth Avenue. So that's just to give you an idea of that. Is that where you're going to be interviewing people? That's where I'm staying the night when we do Boat Green this weekend. The president wants two scoops. Mr. President, you and Lisa Mateo, 16 scoops of assorted ice cream, whipped cream, L &M's, chocolate caramel, raspberry. This is popping$350 before the$77 service fee. But you know what made a cameo? The Home Alone movie. The Home Alone movie. The president was there in that movie. He made a cameo.

54:16Alicia Levine:He did. Right when he's walking through the hall. Tim Curry also had a cameo in that movie. Or no, it was in the cameo. It was an actual role. But they have a whole Home Alone package that you can have there.

54:25Henry McVey:Take you for the limo ride and everything. You have some important conversations this weekend. I mean, within the uproar that Scarlett and I have been reporting on all week. Oh, most definitely. The backdrop is not a Home Alone Sunday. The backdrop is some serious conversations. Yes, some serious conversations. It's Christina Ruffini, David Gurra. They'll be going, we're starting at 7 a.m. We're going all the way through until about 1 p.m. So it's going to be a long day, a lot of guests filled up within there. And they're excited for it. We've been prepping for it for a long time. We have a great team behind us for this.

54:53Henry McVey:And they're just excited about it. I see Jenny Johnson.

54:57Alicia Levine:I see Howard Marks. You've got a gold star panel here of guests coming up that'll kind of set the tone for this new era of the economy and investing that we have here upon us. Lisa, thank you so much. Lisa Matteo of Bloomberg this weekend. And be sure to watch Bloomberg this weekend every Saturday and Sunday morning, starting at 7 a.m. Eastern time with that special coverage of QEF on Sunday.

55:19Henry McVey:That's all. It is Bloomberg money. It's been an extraordinary week. I mean, I can't imagine staggering into October here. I can't wait for next Friday.

55:28Alicia Levine:Can you imagine what's going to happen?

55:29Henry McVey:Thank you to our team. It's so wonderful that Kieran picked up a home alone Sunday for us all to have here. Good afternoon.

55:42Henry McVey: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.

56:37Alicia Levine:Thank you. more at business.optum.com.

56:43Henry McVey:This is Alexis Christophorus for Bloomberg Surveillance. Most companies have tried AI. Most aren't seeing results. Not because AI doesn't work. It's because AI hasn't reached the workflows yet. That's the gap Asana is built to close. Asana is the operating system for human agent teams. Ready to go AI teammates pre-built for marketing, ops, and IT. No prompt engineering, no setup. They show up where the work is happening, already onboarded in your workflows ready to deliver. Asana, where humans and agents workflow together. Try it at asana.com. That's A-S-A-N-A dot com.

57:16Alicia Levine:This podcast is brought to you by Navy Federal Credit Union. Their flagship Premier Card gives you four times points on all travel. Earn on flights, hotels, ride shares, and more. Plus, the flagship Premier Card doesn't require you to use any booking portals and has no rewards limits. It's all the travel, none of the baggage? Visit NavyFederal.org slash flagship premier to find out more. Navy Federal is insured by NCUA. Terms and conditions apply for rewards.