This is Bloomberg Wall Street Week.
And we may not have an overall recession, We're having a rolling recession. Econy of roll looks pretty strongly. It is when it comes to jobs.
The financial stories that shape our world.
Three major regional bank failures send shockwaves through the banking system. We're all trying to figure out what to make of generative AI.
Through the eyes of the most influential voices.
Welcome down, Doctor Paul Krugman, Ryan moynihan, a Bank of America, deebro Lair of the Paulson Institute, well Then Hubbard of the Columbia Business School.
Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
A war continues, a strike moves toward conclusion, and the US economy just keeps on keeping on. This is Bloomberg Wall Street Week. I'm David Weston this week. Roger Altman of Evercore on the financial world coming to terms with a world of higher bond yield.
With the very long, roughly fifteen year period of ultra low interest rates is over.
And Tom Knight's former US investor in Israel, on what the Israel war with Hamas means for the rest of us.
We're not at war with the policity people quite the offer said, We're at war with Hamas.
Global Wall Street spent the week dealing with a new version of the issues it faced last week, starting with Israeli military action against Hamas in Gaza, as diplomatic efforts continued to keep the war from spreading in the region.
Israel has it right, and I would add a responsibility to respond to the slaughter of their people, and we will ensure Israel has what a need to defend itself against these terrorists.
And humanitarian groups struggled to get food, medicine, and fuel to those in desperate need.
We've seen this picture before and it doesn't look very good, particularly when you have so many civilians who are caught in the middle.
Back in the United States, the UAW strike brought a tentative agreement with four.
We reached a historic agreement.
As you know, in our union, the members are the highest authority.
And big tech earnings came in mixed.
I think you know alls that and done Cloud is the major story here, But at the end of the day, it really is good.
Numbers a front all their businesses.
Alphabet, the parent company of Google, pretty much only missed in its Cloud division, sales of eight point four to one billion below street estimates of eight point six billion, also missing on the bottom line in that unit as well.
Morgan Stanley named its new CEO, Ted Pick, taking over from James Gorman the first of the year.
That next cycle is going to be investment banking led, and it means that inequities.
You want to be one or two every quarter as we have in the last decade. We have fixed income business, we were structured. It's now a top.
Five business, and investment banking is going to lead the next cycle.
The House of Representatives, after three long weeks, finally came up with a speaker.
The challenge before us is great, but the time for action is now.
But through it all, the US economy continued to surprise in a good way, with GDP growth numbers way trend, with the third quarter growing by four point nine percent.
It's a good strong number, and it chose an economy sixteen very well. Let's remember it is just one quarter's number.
But as much as the economy soared this week, it did not bring the markets along with it. The S and P five hundred was down over two and a half percent for the week, falling to forty one seventeen. That is well below the median year end number projected by our Bloomberg Elves, which is up at forty four
to thirty five. The NASAC was down just over two point six percent, and this week we can't blame the cell off in stocks on a similar move away from bonds, as the yield actually gave up nearly fifteen basis points on the week. Here to t help us sort it all out are Chris Harvey, Wells Fargo head of Equity Strategy and Kristin Bitterley City Global Wealth, head of Investment Solutions. By the way, congratulates on your big promotion titled yeah
good for years, so much good for you. So Chris, let me start with you, what did we see in the markets this week? I mean, there were a lot of factors of play. We had the war in Israel, we had the GDP numbers. What do you think really is driving the market right now?
So even though rates went down, it's still concern we don't know where the ceiling is on interest rates and so as a result, it's really hard to have an equity floor.
You combine that.
With geopolitical, which is just a complete Nutter wild card.
And then the reaction to earnings.
We had.
The earnings overall were okay, you had some good, you had some bad, but the overall guidance the market really didn't like.
And you throw that all together and it was a difficult week.
We've got the FOMC next week. Is that going to help us? Because most people think we know what it's going to do, which is nothing.
It may help us. I have my fingers crossed. I'm hoping it will help us. There's really two things next week. It's the Treasury refunding announcement and it's FOMC.
If the Treasury.
Announces and they don't need as much paper as people suspect, or they come in line with expectations, that's a good thing. If the FOMC plays ball and says, okay, we're done, we're good here for now, that could stabilize the markets. But it's going to take a lot to really stabilize the market. It's they're very generate at this point in time. And again I don't want to overemphasize geopolitical, but it really adds a whole new dimension.
To things Christian where are you do we have a sense of where the market is going, particularly when it comes to rates and yields.
Yeah.
So I think everyone was hopeful that during this earning season we would go back to fundamentals, it would be stories about companies, and I think what happened over the past couple of weeks, given geopolitics, given the rise in oil, and just given the fact that the tenure crossed over five percent, it became much more about these macro conditions. And when we look at the price action, yes, it's given back some of that increase, But when we look at the price action on the tenure and the effect
of tightening that that implies. So we don't expect that the Fed's going to raise rates or do anything next week. But I think the big question here is, in this environment of rates being higher for longer and the market doing some of the financial tightening for the FED, what is really then the backdrop for corporate profitability and how much is it.
Up to the Fed at this point? I mean, the Fed didn't rates that really drove those yields. The yields went up on their own, and Chris, you mentioned the auction coming up this week. Part of it is the supply of treasuries.
Christmas.
Part of it is the supply, so you have to look at supply, demand and balances when it comes to the tenure. So you have the supply, you have the increased issuance, and then you have the question around who is buying. And I think one of the things that we have seen from our investors is, yes, you have the attractiveness of the front part of the yield curve, but you also have even going out kind of two
to five years, you have really attractive yields. You have corporate investment grade bonds that you know at five years five years are yielding around six to six and a half percent. So there are really really attractive parts within the fixed income market where you don't have to go out ten years. So we see a lot of the activity still concentrated on that front end.
Of the curve.
So let me just play off that because I think Kristen hit onto something.
It's really on a tenure.
It's not so much about fundamentals, it's about technicals and it's about positioning. And the technicals aren't great, especially if the Treasury comes out with they need more paper.
Than people expect. That's going to be a problem.
The other issue is if you're long further out on the curve, right, if you're a long duration buyer, you're probably underwater at this point in time. You're trying to catch a falling knife. There's lots of disincentives at this point in time. And Chris and I were talking earlier, who's last who's that buyer of the treasury, who's that
buyer of long duration assets? And it's really hard to find that person at this point in time, and everyone's waiting for somebody else to step up, And that's a problem.
Maybe all long duration. But you can get real return on cash or close to cash about to two years or so. Like that Does that hurt equity sales because by the way, I can get some return by just keeping it in money markets.
I think it hurts all risk product.
So why go out on the curve when you can get a higher yield at the front end of the curve. I don't need to take that duration risk. And then for equities, hey, I have this stable earnings in a period where there's a lot of instability, maybe I'll just put a portion of it there. And so yes, to a certain degree, it is hurting equities.
Kristin, what about that duration question, because do I want to keep it in case or near cash or at some point should I lock in some of those rates even on the fixed income because it may shift the other way.
I think it's a balance. So when you look at it building an income portfolio, I think if there's one bright spot, it is the fact that you can build really attractive fixed income portfolios. A portion of that is going to be TVL. So the fact that you can get really high yields on the very very short end of the curve. We are encouraging our investors to take
advantage of that. But remember you have real reinvestment risks, So depending upon what happens from here on out, you are going to have that moment in time where that yield is not going to be there. So the idea that you can get above five percent going out two to five years, you don't even have to stretch in
terms of credit quality. You can get this within investment grade corporates, you can stay within government bonds, and you can actually have this very diversified portfolio that's providing income within mid to high single digits. So your earlier question if you're an investor getting mid to high single digits without really stretching in credit quality. How attractive are equities at these levels?
And that's the fight.
Now, there is one thing that's going on, and I'm sure Christen has seen this and talked about it, is the negative carry. In other words, the Yal curve has been incredibly inverted for a long time. If we go back to July, it was over one hundred bases points of inversion. Now we're only looking at fifteen twenty. That was one of the reasons why the duration players weren't stepping up is because it didn't make any sense.
There was a real negative carry there.
But as that curve goes to zero, it looks like it's going to go to zero. Now you can start having people move out in the curve without being penalized. But we haven't seen that yet, and that's what we're looking for, and maybe that will also beside FOMC and Treasury help stabilize the bond.
So help me on that. Understand it, because I've read about so called pancake Right, we visually have a flat curve, it's not tilted one way or the other. Let's assume the moment it goes and stays around a flat curve for a while, and how does that change my portfolio building?
So what it does, it's not. It doesn't penalize you for going out on the curve. So when the curve is negative, right when it's inverted, you're giving up a lot of carrier, giving up a lot of yields.
So you have to get duration right.
In other words, you have to get it right when interest rates start to fall, otherwise it's going to be a very painful process. As the curve flattens out, we don't have to play around with that.
That becomes less of an issue.
And if you look at the macro, yes, the macro right here, right now is a little bit troubling. But an inflation has come down. The Fed looks like it's going to stop. And if you go back to six when the Fed stopped there tightening that four to six tightening cycle, real rates drop, nominal race drop once they stopped, And so there could be a catalyst here, a small one, albeit for duration buyers.
But we'll see.
Okay, Thank you so very much to Chris Harvey as wells Rogo and Kristin Bitterly of City coming up. Sky high federal deficits help drive borrowing costs up. We talk with Evercred Roger Altman about how Washington fiscal actions affect Wall Street. That's the next time Wall Street Week Bloomberg.
This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
This is Wall Street Week. I'm David Weston. This week brought a tentative settlement between the UAW and Ford, with reports that GM instillances may not be too far behind, but it comes with a price of substantially higher wages. So Christen, let me start with you. We do have the settlement. We do see labor costs going up. Ups reported it. You saw it affected their earnings. Are we seeing much margin pressure such so far because of labor as far as you can.
Tell from the earning seats, You know what I would say this earning season, I actually think we continue to see some resiliency within earnings and there's actually potentially a path to seeing positive earnings growth, which has not been the case for the past three quarters. I would say though, in terms of the market reaction and what we're seeing around earnings, it's much more of a macro picture rates are still in the driver's seat, But the other part
that's in the driver's seat is tech. And so you've seen some pretty binary react in terms of not only the earnings but also forward guidance in terms of their expectations, and the market is heavily reacting to that. And if you look at volatility around earnings, we are seeing a wider spread in terms of some of those movements than we have seen in prior earning seasons.
So, Chris, when I hear tech, I think about magnificent seven, right, isn't that we call it these days? That's what we are they holding up? Because we saw a little bit of shakiness in some of those magnificent seven this week.
So the answer to that is the stocks aren't holding up that well.
What it is is some good, some bad.
The underlying fundamentals fine, right, the reaction function.
Not so fine.
In some cases that's part of guidance. But here's a funny thing. If you're a company, your stock's up one hundred percent, you're looking forward, you might want to manage expectations bring things down, so your stock goes down five ten percent. You're already up one hundred You want to load those expectations for next year. You want to set
things up for next year. And so it's not quite clear to me if it's a man of expectations or they're really saying something that we're not seeing, because the results for some of the companies are actually quite good.
Well, what are the patterns that you're seeing so far, Chris in this earning season.
So surprisingly, what we're seeing is margins are holding up well, we're seeing top line beats.
But the issue is, or the rub.
Is, guidance hasn't been as good as it has been in the past, and companies are being taken down a notch due to that.
Whether that's because they're.
Again they're seeing something that we're not seeing, they're being more conservative, they're managing expectations unclear, But the underlying fundamentals
in the here and the now are fine. The last thing I'd say is that when we look at earnings and we go through transcripts, assuming we go through transcripts and we look at what the c suite is saying, we are seeing things that tone chains get a little bit darker around the consumer, which isn't a surprise, but it's something we're watching very closely.
Which is something you mentioned earlier, Kristen exactly.
I think the other thing, too is when you look at going back to this conversation around Tech and the Magnificent seven, those stocks are priced for perfection, right, So of course there's going to be a little bit of an overreaction to and giving back some of the gains that we've experienced here to date because as we all know, the market has been so concentrated in those seven stocks. So I think what is interesting is as we're kind of if we've seen the bottoming of corporate earnings and
now we're kind of pivoting into modest growth. I do think twenty twenty four, Chris, I'm not sure about your view on this, but I think twenty twenty four the outlook is a little bit too rosy, especially if you're higher for longer rates.
I think that's right.
But within that there are opportunities in some of these sectors and some.
Of the price effect. Yeah, we'll talk about defensive stocks. Let's talk about small and mid caps, because yeah, those are not I don't think price.
Perfection, no.
If you look at small and mid caps, I think the interesting thing is, of course, if you're in a higher interest rate environment. This idea that are their balance sheets clean? Are they exposed to floating rate debt? But within let's take like midcaps. Within mid caps, you have parts of that market that actually are profitable. Let's take like industrials. Right, So if we're looking at industrials, you're
looking at infrastructure, defense. Industrials are only like ten percent of large cap, but like twenty percent of mid cap. Are there opportunities within there to have exposure that makes sense from a valuation perspective as as well as a go forward perspective?
Absolutely?
Okay, thank you so very much to Chris Harvey as well as Fargo and Kristen's Bitterly of a City. Israel's war with Hamas is entering its fourth week now, with continued strikes and counter strikes on Gaza and israel efforts to get humanitarian aid into the territory and feverish diplomatic efforts to contain the conflicts. Welcome now, Tom Nydes He's a former Morgan Stanley COO, former Deputy Secretary of State, and he also just stepped down as US ambassador Israel
last month. So Tom, thank you so much for joining us. Good to have you here. We all see the consequences for people living in Israel and in Gaza every day in video, but for many of the rest of us, particularly in the business world, the consequences made determined and determined by whether or not this conflict spreads beyond Israel and Amas. What are the factors from your point of view that will determine whether it does spread?
Well? Listen, David, First, I appreciate you having me.
This is the question because ultimately one of the things that the present has been very clear about, regardless of you you love him or hate him, the reality has been very clear to the Iranians because the Iranian proxies we're really talking about hesbl in particular, as he likes to say, superpowers don't bluff. And it's also helped that they move to some very large ships into the Mediterranean
every day. This White House is working to put pressure on those proxies, those in Lebanon and yes, in Syria, but more really, the Iranians don't do it. Don't do it because the Two Front war. Who's that question, will have the enormous consequences in the state of Israel, and to be clear, will have enormous consequences to Lebanon and Iran. So I think when they're sitting around thinking about this in Tehran, I think thinking long and hard about what the consequences.
Could be of them getting involved. But it certainly is a risk.
Sometime we see, for example, sexual a state blink and going to the region, we see various activities. I'm sure nine tenths of what's going on we never see and we're not meant to see without revealing anything you shouldn't reveal that's confidential. What sorts of things do you expect is going on behind the scenes.
Well, first of all, they're pushing the Israelis very strongly about getting humanitarian aid into Gaza. Listen, Hamas is doing exactly what they want to do. They want to create unbelievable carnage in Israel, which they certainly did. They then really, as you know, don't really care about the Palacinian people.
They're using them as human shields.
You know, this is Hamas isn't seen around and says let's come up with a two state solution. Now Hamas is like Isis and their goal is destroy the state of Israel. On the other hand, the vast vast majority of Palaestinians just want to live in peace and prosperity and freedom.
You know.
They We're not at war with the Palacinia people. Quite the opposite, we're at war with Hamas. And so I think what the President and Secretary Blincoln is trying to do is relieve this humanitarian suffering that's going on in Gaz.
It's it's it's terrible.
It's on the phone with a very close friend of mine just this morning who has a very large business in the West Bank and.
Has many, many, many people.
In Gaza with his operations there. It's heartbreaking. So I don't you know, I don't like any of this, to say the least. We should keep focus on how we got here. But at the end of the day, what you're hearing, what you're not hearing is the pressure that that Secretary of Blincoln and the President and the Vice President is putting on not only the Egyptians and the Qataris and all the people that begin this humanitarian aid, and also to make sure the Israelis are making smart military decisions.
And I think that's very important as well.
You mentioned Katar, you mentioned Egypt, one other Saudi Arabia. It could play a very significant role here. What do you expect to go on in Sali Arabia. We thought we might have been on the brink actually of a peace agreement between sell Out Arabia and Israel that certainly been put off for the time being.
Well, you know, David, as you know you and I've spoken about this.
I've been a very strong advocate of getting a deal done with Saudi Arabia. A normalized deal with Saudi Arabia and the State of Israel and with security agreements in the United States would only be better for the region, just like the Abraham Accords were. If you look at the abram Cords that were obviously done on the Trump administration, I praise up all the time when I was in the region, the idea of Bahrain in Morocco and the UAE was a game changer for the region. And this
situation would be even worse if it wasn't the case. Now, How grand would it be today if we had a normalization with Saudi Arabia and Israel.
Because ultimately that makes the region more secure.
So I am I'm actually quite confident after this is over, and god knows how long it will be that the size will in fact want to re engage because quite frankly, they see the same threat that we see in Israel sees, which is the Iranian threat.
Tom, thank you so very much for being on Wall Street. We really appreciate that's Tom Knydes, former US Ambassador to Israel, coming up. Sky high federal deficits help drive borrowing costs up. We talk with Evercred Roger Altman about how Washington fiscal actions affect Wall Street. That's next on Wall Street Week on Bloomberg.
This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
This is Wall Street Week. I'm David Weston.
Global.
Wall Street is trying to come to terms with higher yields, driven in no small part by the federal deficit and the need for more borrowing, something that FED Chair J Powell say they pay attention to it the FED, but that former Treasury Secretary Larry Summer says is a bigger problem perhaps than the FED may understand.
The Actually the fiscal authorities have oversight over us and not the other way around, So we stay away from that. So I would just say everyone knows that it's not a secret, and about all I can say is we know that we're on an unsustainable path fiscally.
There was a big Newfoundland of a dog that wasn't barking as he was speaking, and that's everything about the federal fiscal situation.
For a better sense of what these deficits in Congress, this difficulty in dealing with them may mean for the world of Wall Street. Welcome now back Roger Oltman. He's founder and senior chairman of Evercore. Roger, thank you so much for being.
Back with I could be here with you, David, So you've had a lot of.
Experience in Washington, the Treasury Department, as well as here on Wall Street. First of all, explain what you think j. Powell means when he says it's unsustainable.
Well, as Herbside once said, when something's unsustainable, it actually stops. But I know what I think when I hear that term.
I'm not sure exactly what he means, but as a person who's spent so much time in and around markets, I think that it's just a matter of time before global financial markets turn their attention to this very poor fiscal trajectory in the United States and reject it and absent unless we change course fiscally on our own voluntarily before that moment, there'll be a crisis, and it will only be Many would argue it will only be a crisis that will cause the authorities to adjust fiscal policy,
for example, additional revenue. So that's what I think of when I hear the term unsustainable as a relation to the deficit. They will come a moment of reckoning when financial markets reject this course, will have a crisis, and that will force the hands of the Congress and the executive branch in terms of changing policy.
That's not a good way to do it. I hope we don't do it that way. Be much better to.
In effect agree that we need a different path and proactively choose one. But at the moment you have to be a real optimist to think that's going to be the way it happens.
We like to think of markets as anticipating the future to some extent and discounting it and really taking into account. Are the markets not discounting at all right now? Or is that perhaps part of the reason we're seeing, for example, the yield on the thirty year for example, go up. Is it because of some beginning of concern about repaying role at debt.
It's hard to say. I would not say that right this moment. Fiscal concerns are one of the top two or three factors driving markets.
Whether they're affecting the thirty year debatable.
There recently been a couple of very sloppy treasury auctions, although they were shorter maturity auctions than that, and that's always a sign of concern. And keep in mind we're at a moment we have this very poor fiscal trajectory, at a moment of quantitative tightening.
So has gone from.
Buying billions of dollars of treasury and government backed securities during the quantitative easing period, which lasted a very long time, to now selling down aggressively its bond portfolio. And what that means is it's adding to the supply in effect of treasuries that the market has to absorb because the FED is a seller, and then you have the Treasury itself issuing giant amounts of new securities.
That's adding to the complexity.
So Roger, let's go beyond the deficit and talk about other things that are affecting business today, and specifically what we've seen in the yields, because goodness knows, they've come up a long way, really fast.
Well, we've seen, to quote my friend Howard Mark, say, see change in the financial market environment in the sense that the very long, roughly fifteen year period of ultra low interest rates, at least, I would argue, is over.
It's not temporarily interrupted, it's over. And now today, in round numbers, we have a five percent ten year yield and we haven't seen that for I think since two thousand and seven, and I think a lot of market participants, in particular to your question, business leaders are just beginning to grasp that we are in a new era in terms of the structure of interest rates. It's a profound change because it affects not just obviously cost of capital,
but it affects asset allocation. It affects returns. I mean, if you're a financial imagine you're a private equity firm and they are so ubiquitous, this fundamentally changes the return prospects for them because the cost of that leverage is such that they can't leverage XYZ investment to the same degree today that they could have a year or two ago.
But I think a lot of people are just waking up to this.
And I'm sure some people listening to this would disagree that we've seen the end of ultra low interest rates, but I'm convinced we have and.
It's really a profound change.
Now, how much it affects you as a CEO depends on the nature of your business, how capital intensive it is. Are you, by the nature of your business, a you generate consistent free cash flow or are you generating deficits instead and doing a lot of financing. So, if you're Apple, you actually do borrow because of your international business versus domestic and the role of share buybacks, but you're not a net borrower in terms of net debt, and it
affects you, but it doesn't affect you very dramatically. But if you're Blackstone or your Kkar or your Apollo and so forth, very dramatic effect.
So you say some corporate leaders are just waking up to this process, is that at least impart the answer fundamental question, at least I have The economy seems to be charging along. When you look at GDP numbers, you look at retail sales, you look at so many indicators, even the labor market. Maybe loosening a bit, but it's still pretty strong labor market. How can the economy doing this well, We've had this many rate hikes out of the FED and this increase in the yields on the bonds.
I think the economy is slowing.
Now.
You're right that it's still resilient.
It's not falling off a cliff where there's no evidence at the moment of an incipient recession, I mean like next week or next month.
But I think it is slowing.
You look at the housing sector, and of course the sharp rise and mortgage rates always would have the effect that's having here, but new home sales, mortgage applications all sharply down, as you would imagine.
And you look at a whole series of other surveys. At evercorep we do.
A series of proprietary surveys trucking, temporary employment agencies, airlines, restaurants, a whole series of them, and we do them regularly, and I think it's quite a good set of data, and.
They're pointing to a serious slowdown.
So the composite reading of our surveys is above recession levels.
But it's come down a lot.
So I think the economy, despite the backward looking strong data is slowing down?
Are we about to have a recession? I don't think so.
I don't know about next year, but I don't think in the rest of this year twenty twenty three.
But this definitely slow down occurring.
By the way, for your data, I get Adheimens slides every day and I read them every day. Well, you know what I mean, I do know executly what maan. I read those surveys every single day in some slide form. So how does a corporate CEO respond? I mean, obviously there's a lot of different corporate CEOs, a lot of different reactions. But do they just pull on their horns at this point? In partly because it's more expensive, but also important because I CEO don't know exactly where it's.
Going well, and of course it depends on what your business is.
So you're seeing some surprising strength given the level of interest rates giving and how old this recovery simply is this recovery is more than three years old. It began in the early second half of twenty twenty. You know, you see Walmart doing very well, you see Procter and Gamble doing very well, and those are really broad based companies, and they're a sign of the resilience of this economy.
On the other hand, you know, you see some companies there been some bigger earnings reports the last day or two which have been somewhat disappointing alphabet and so forth.
Really depends on the business you're in. But if you take all these.
Earnings reports together, they do show resilience. I say, it's slowing, but there's still considerable resilience, especially businesses that depend on the day and day out consumer, because the consumer still has, for example, considerable excess pandemic related excess savings, and as you say, labor markets remain pretty tight, and so consumers are doing well from an employment point of view, and a lot of consumers are right about even in terms
of real after income, but still they are resilient.
Roger, it's oh, such a pleasure I have you with this here on Wall Street. Thank you so much. Such Roger Altman of Evercore coming up when okay, Boomer is a not so subtle hint that we should be getting off the stage. That's next time, Wall Street Week on Bloomberg.
This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
Finally, one more thought. The big elephant in the whole system is the baby boomer generation that marches through like a herd of elephants. That's how Senator Lindsay Graham described one of the biggest fiscal challenges we face. But the problem goes way past just bankrupting Social Security and medicare. Everywhere we look these days, we find baby boomers and yes, that is my generation, and we remain on the stage without making room for the generations coming up behind us.
There are a few exceptions, to be sure, like Ray Daalio, who has decided to step down from Bridgewater.
I'm at a phase in my life where it's very natural, seventy four years old and the most important thing for me is to pass along everything.
But for every Ray Dalio, it seems there's a host of US boomers who are just fine staying in the limelight. We see it in network television, where the long running Bachelor series on ABC has added a Golden Bachelor version, complete with an eligible widower looking for love at that Golden get It Golden Age of set two. We see it in sports, as Phil Nicholson won the PGA Championship just two years ago at the age of fifty and
is still competing on the tour. We even see it in real estate, as the elderly hold onto their homes longer, putting even more stress on an already troubled housing market.
We call that phenomenon aging in place. And what used to be is that the home ownership rate when you hit about sixty five would drop precipitously. But like in everything else, with the Baby Boomer generation, they're behaving differently, and so they are something like ten percentage points more likely to be homeowners.
And when it comes to the economy overall, once again, it's the boomers, as Bank of America analysis this week found that boomers and traditionalists are the only groups to increase consumption. But maybe the biggest example of US boomers holding on is on the concert stage, with the Rolling Stones still touring led by lead singer Mick Jagger at age eighty, Neil Diamond going strong at eighty two, and the much younger Bonnie Rait on stage at seventy three. And then there's the Boss.
This is what I've presented to you all these years, as my long and noisy prayer, as my.
Magic trick, Bruce Springsteen, at seventy four, started his latest tour this year, so he'll be going at least well into twenty twenty four. But Bruce Springsteen is once again leading the way for boomers, not quite by getting off the stage, than by taking a big step toward that, selling off his music catalog and getting a cool five hundred million dollars for it. That is a record amount, with the buyers backed in part by Blackstone, KKR and Blackrock.
And right now it looks like Springsteen's timing was once again impeccable. As Bloomberg opinion commist Leonel Laurent lays out this week, licensing music isn't as easy as it may have appeared, and the funds that bought those boomer catalogs are getting hit with lower valuations. Mister Springsteen may have sold at the top of the market, But you know one performer who isn't worried about any of this the
very much not boomer Taylor Swift. As we learned this week that Miss Swift is now a billionaire in her own right, and boy has she taken over the stage from older artists. So maybe the younger generation will push us all off the stage after all. Eventually, this has been the most extraordinary experience of my entire life. That does it For this episode of One All Street Week, I'm David Weston. This is Bloomberg. See you next week.