The young (wealthy) Americans

Make Me Smart February 7, 2024 Transcript

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Kai Ryssdal 

Look on the theory that you got things to do, I’m ready to go whenever you want to go.

Amy Scott 

Yeah, I’m good. I’m good whenever.

Kai Ryssdal 

All right. Hey everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart, where we make today make sense.

Amy Scott 

And I’m Amy Scott filling in today for Kimberly Adams. Thanks for joining us this Wednesday. It is February 7.

Kai Ryssdal 

It is indeed February the seventh. And it being February the seventh, here’s what we’re going to do. We’re going to do some news, then we’re going to do some smiles. And then we’re going to get on about our merry way. Amy Scott, you get to go first. What do you got?

Amy Scott 

Okay. Well, I saw this this morning, I guess in Bloomberg, but it came from a blog post from the New York Fed, which looked at the growth in wealth since the pandemic and a pretty surprising headline, “Younger adults far outpaced other groups in wealth growth since the pandemic.” And I just found this fascinating. The total wealth among people under 40, adults under 40, I should say, rose 80% since 2019, compared to just 10%, for those of us between 40 and 54, and 30% for folks over 55. And economists say this is partly because of the stock market. Gains in the stock market, financial assets contributed most of the difference in growth. And I was surprised that young people are that invested in the stock market, but apparently, because this group tends to have less income, they got more COVID era relief. So, they have more savings to invest in stocks. And the stock market did really well after 2019 for several years. Of course, there’s a downside to that risk that could reverse some of those gains. But I think it’s interesting, you know, in theory, it could help kind of close the gap and accumulated wealth as these young folks get older.

Kai Ryssdal 

Yeah, I think, you know, obviously, buying property is the easiest way and most intergenerational way to build wealth, but the market is another way. And I do think it’s interesting that younger people are in the market more now. And I think that’s exactly right. Right? They got all this money during the pandemic, all this money, relatively speaking. Right. That was you know, it was like found money and they put in the market and the market since, you know, the bottom in 2020 has been doing all right. And it was that was four bleeping years ago now. And so, it’s had time to grow. I know.

Amy Scott 

Yeah I mean, I should point out that folks under 40, still, at least as of 2019, held just 5% of total US wealth, so they make up 37% of the population. But in theory gives these folks an extra boost, though, I’m sure it’s not widely, or evenly distributed. More to say about that another time.

Kai Ryssdal 

Yeah, that’s a whole different thing.

Amy Scott 

All right. How about you?

Kai Ryssdal 

Alright, so here’s mine. And it’s, it’s kind of related about wealth and banking, and, you know, income in this country. So, there’s a bank in New York called the New York Community Bank, which is bringing back the specter of Silicon Valley Bank and some of the others that ran into some trouble March a year ago, I guess it was. The regional banking, I don’t want to say crisis, I think I called it a situation. That is exactly what we called it. I’m glad you’re here. Anyway. So that it’s another regional bank, not a small one that is having some challenges. It says to be clear; the bank says it has not had a run of deposits. It has not had very bad things happen. But it put out a disappointing earnings report. It says it’s got plenty of capital. But it only takes a momentary loss of confidence in a bank for very bad things to happen. So regional banks are again in the news. And I mentioned it because the Secretary of the Treasury was on Capitol Hill earlier this week, where she said, regional banks are actually, and I think the word she used was a worry or a point of stress in the system. But she was confident that regulators can handle it. And to be clear, the regulators did handle it expeditiously and without too much pain for the rest of the banking system back March a year ago. But it’s not, the regional banking is still not completely done. The big Wall Street banks are fine. They make bazillion dollars. It’s the layer down that is kind of challenged. And we should all be aware of that. You know?

Amy Scott 

Yeah, and it’s interesting. Isn’t the reason or one of the reasons they’re kind of in this trouble, because they took the assets of Signature Bank after it failed. And that put them in this different higher regulatory category where they had to have more capital on hand. So, it’s still it’s sort of sort of the aftermath of the rescue of the regional banking sector that is doing this.

Kai Ryssdal 

Exactly. Exactly. And look, capital requirements. Banks are always like, no, no, no, we got plenty of cash. We don’t need no capital requirements, which is to say the money that they have to keep in the bank in case things go south. And then it turns out that having capital reserves is really helpful and useful. So, you know, it’s a push pull. It’s a push pull. Alright, Jaky Cherry, I believe it’s your turn to push a button. There we go. What do you got?

Amy Scott 

Well Marissa Cabrera sent me this one. It is a photo of a polar bear sleeping on an iceberg. Have you seen this? I have not till I clicked on this link. Oh Kai, you gotta click. It’s so cute. Alright, good. So, it seems like a lot of photos of polar bears are really sad and depressing because of climate change. But this is just this like fat little guy, girl. I don’t know the gender of the bear, sleeping on an iceberg near Svalbard, which is this very cool archipelago territory of Norway, way above the Arctic Circle. And the photographer won the 2023 Wildlife Photographer of the Year People’s Choice Award, which is hosted by London’s Natural History Museum. It’s a British amateur photographer named Nima Sarikhani. And it’s just really sweet, so check it out.

Kai Ryssdal 

You totally should. You totally should. And it’s really cool because as the photographer points out in the in the text accompanying this picture. Most pictures of these kinds of climate change pictures are challenging. This one she says inspires hope, and it kind of does. It Kind of does. It does. Kind of neat. Mine is a thing I didn’t know existed until today, which is competitive jigsaw puzzling. I’m not a jigsaw puzzle-er, but my wife and our daughter are. Competitive speed puzzling, these people are doing five, the people who win the championships are doing 500-piece puzzles, rather, in 37 minutes, which is just are kidding me. And here’s my thing. I always thought puzzles were the thing for like on vacations by the lake or whatever on a weekday or pandemic, right? But you know, when you’re inside you got a lot of time whenever you take your time and you do a couple of pieces as you pass by on the way to whatever, you know? These people are sitting down and they’re like practicing and drilling. I mean yay for them. But why?

Amy Scott 

That sounds stressful, though. Isn’t it supposed to be relaxing?

Kai Ryssdal

Exactly. Exactly. That’s what I’m saying.

Amy Scott

But like, if there’s a thing that you can do, there’s a competition, right? Of course, we made this a competition.

Kai Ryssdal 

Of course, we did because of course. Anyway. There we go quick and easy today. We’re done today, back tomorrow. You know how to get a hold of us if you need to. Thoughts, questions, comments, criticisms or compliments: makemesmart@marketplace.org or leave us voicemail 508, the letter U, the letter B, and then SMART

Amy Scott 

Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Jayk Cherry. Thalia Menchaca is our intern.

Kai Ryssdal 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. Francesca Levy is the Executive Director of Digital and On Demand. Look, you know, I have to entertain myself somehow. That’s all I’m saying.