Bank Earnings, Why Consumers Are 'Roughed Up' & Real Estate Trends

Scarlet Fu (0:02)

Bloomberg Audio Studios. Podcasts, radio, news.

David Gura (0:07)

Bloomberg Money.

Tom Keene (0:12)

This is the Bloomberg Money Podcast. I'm Tom Keene with Scarlet Fu.

Join us each week for a smart look at the forces shaping your financial life on personal finance, on retirement, and wealth management. We will explore how people are earning, investing, and building wealth. We are live Fridays at noon Eastern on Bloomberg Television. Subscribe to the podcast wherever you listen, and as always on the Bloomberg Terminal and the Bloomberg Business App.

Good noon, everyone. Bloomberg Money, it's on personal finance, it's on retirement, wealth management. We're going to talk about that today after those bank earnings. This week, Tom Keene, Scarlet Fu. Good afternoon. I mean, my head is swirling here, and I just as a grounding center gloom, fear that Apple is still, as we go to air here, a $5 trillion company.

Scarlet Fu (1:14)

Well, thanks to the foldable phone. If you want to order that-

Tom Keene (1:16)

Are you getting one?

Scarlet Fu (1:17)

No, I'm not. No, wait. I'm not a first adopter.

Tom Keene (1:19)

We stop right now. We halt the show because the first person I know that will get the foldable iPhone is Sree Natarajan. Come on, Sree. Are you going to get the foldable iPhone?

Sree Natarajan (1:27)

If it was a flip phone, yes, not the foldable.

Tom Keene (1:29)

There we go. Okay. Well, there we're done. Sree will join us here on wealth management here in a moment. It's a wonderful show. Scarlet's going to tell you an important part of the show on real estate. Thomas Porcelli will join us. He's chief economist at Wells Fargo. He is the number one guy I know on wage growth or lack thereof. Tom Porcelli will tell us about the state of the American worker.

Scarlet Fu (1:52)

In the age of seven and a half percent mortgages, we take aim at the challenges of home purchases. With a one-two punch, we've got Jonathan Miller, who co-founded his own appraisal and valuation firm, and Bess Freedman, CEO of Brown Harris Stevens.

Tom Keene (2:03)

Do you think they're on speaking terms?

I hope so. We'll have to see a wonderful Bloomberg set of conversations after a busy week. Street Night of Rajan, wonderful to have for the first time on the show. Yes, the banks, the big banks, but we're going to talk wealth management with three. Stacey Vanek-Smith will join us. She's done the math on your next Social Security check, or will you get one out there? I guess Jack Lewis says like 2032

Scarlet Fu (2:29)

Well, for people, yeah, who are going to get Social Security after 2030, that's a big question, but you get it now, you're good.

Tom Keene (2:34)

I want to give you a vignette into how Bloomberg works. We're going to air. The control room is all steeled up, and we're talking flag football between the Chargers and the Eagles. That's right.

David Gura (2:46)

Prospect Park this weekend. It's going to rain out weekend after weekend.

Tom Keene (2:48)

Do you have orange slices?

David Gura (2:50)

There'll be orange slices.

Tom Keene (2:51)

There'll be orange slices.

David Gura (2:51)

Gatorade, cooler of Gatorade will be ready.

Tom Keene (2:53)

Let's jump into it right now. Sree, I want to focus on what Bloomberg Money does, which is wealth management. It's usually underplayed when the earnings come out. It's a boom economy, isn't it?

Sree Natarajan (3:03)

Yes, but right now you've got me feeling nostalgic about my old Motorola flip phone, Tom, I have to say.

Tom Keene (3:08)

John Tucker's still using that one. That's a different story. Tell me about wealth management. Tell me about Morgan Stanley leading the way.

Sree Natarajan (3:14)

That's the big story for me through this quarter. You know, you look at the numbers, if you go back to the summer, you talk about the SpaceX IPO back in June, and we talked about the $500 million in fees for the banks that were leading that IPO offering. But that was just the start.

This quarter, Morgan Stanley reported $232 billion in net new assets. What was the analyst's estimate? $111 billion. More than double what analysts had been expecting, and that was largely driven from flows coming from these IPOs as people were getting this public stock. That got deposit in the card. That's a big deal for a firm like Morgan Stanley.

Tom Keene (3:49)

Is wealth management in the future out five years, out 10 years, is it like the money machine, is it a profit machine, or is it narrow margins like, say, ETF fees?