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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lats podcast.

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Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 2: Tracy, It's been a theme in a lot of our

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Speaker 2: episodes lately, but we are in an age where trading

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Speaker 2: and speculation it's just part of the culture. We know

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Speaker 2: that stocks are up, we know that a lot of

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Speaker 2: things are up, but that's different than it being part

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Speaker 2: of pop culture, which it is now.

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Speaker 3: It's a culture of lines, lines going up. People watch

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Speaker 3: the lines.

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Speaker 2: I really think that if you're walking down the street

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Speaker 2: or on the subway and you see like a guy

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Speaker 2: staring at there's a good chance that he's like looking

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Speaker 2: at it.

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Speaker 3: A bitcoin bitcoin shart.

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Speaker 2: Yeah, yeah, any given moment.

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Speaker 3: Well, this was one of the things about bitcoin. It

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Speaker 3: was so volatile, there was actually something to watch. There's

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Speaker 3: like an entertainment factor. But of course when you get

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Speaker 3: this kind of speculative activity, everyone starts worrying about when's

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Speaker 3: it going to end or when's the crash.

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Speaker 2: I have this theory that nobody likes bubbles, and that

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Speaker 2: basically if there is a bubble, there's two camps of people.

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Speaker 2: One camp that is really upset that they're missing out

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Speaker 2: on it, and one camp that is really anxious that

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Speaker 2: they're going to miss the top, and that there are

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Speaker 2: actually very few people in the camp where it's like, oh,

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Speaker 2: this is like really good, I'm really happy.

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Speaker 3: I'm really The people who nail the timing are pretty

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Speaker 3: pleased with themselves, I assume.

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Speaker 2: And there's like five of those people, you know, like

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Speaker 2: that's the problem. Afterwards, always like I sold the top.

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Speaker 4: I feel good.

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Speaker 3: Yeah, absolutely, Okay, So famous crashes, we're going to talk

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Speaker 3: about one of them.

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Speaker 2: You know, I remember the dot com era very well.

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Speaker 2: I don't remember the market environment.

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Speaker 3: We're going to talk about the nineteen twenties. You have

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Speaker 3: no memory of that. Shame on you.

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Speaker 2: I don't remember nineteen twenty nine very well. I did

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Speaker 2: read John Kenneth Galbray's famous book, The Great Crash, But

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Speaker 2: there's a new book out on the great stock market

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Speaker 2: boom and then crash of nineteen twenty nine. We are

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Speaker 2: going to be speaking with the author, someone I'm thrilled

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Speaker 2: to talk to, someone who's accomplishments and work ethic puts

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Speaker 2: us all to shame. We're going to be speaking with

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Speaker 2: the one and only Andrew Rasorkin, founder of Deal Book

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Speaker 2: at New York Times, co creator of Billions, co host

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Speaker 2: of Some squawk Box the NBC. I made that joke

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Speaker 2: with a Jim Cameron, as if I'd never heard the

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Speaker 2: network and now the author of nineteen twenty nine Inside

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Speaker 2: the greatest crash in history and how it shattered a nation. Andrew,

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Speaker 2: thank you so much for coming on odd Laws, thrilled

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Speaker 2: to heavy hair.

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Speaker 5: Thank you for having me. I feel like I'm a

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Speaker 5: longtime listener, first time caller.

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Speaker 4: Amazing.

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Speaker 3: Thank you.

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Speaker 2: So this isn't the first time nineteen twenty nine has

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Speaker 2: been written about in the gall Braith book. It's probably

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Speaker 2: like that was up until now, probably the most famous.

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Speaker 2: It is a great book, right, What was the impulse

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Speaker 2: to go back and write a book about this period

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Speaker 2: of time?

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Speaker 5: To be honest with you, it was about ten years

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Speaker 5: ago I'd written Too Big to Fail. People used to

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Speaker 5: ask me because I had written about the financial crisis

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Speaker 5: at two thousand and eight, they'd ask me questions about

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Speaker 5: nineteen twenty nine, and the.

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Speaker 4: Truth, I didn't really have answers because I sort of knew.

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Speaker 5: I think, like most of the public today, that something

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Speaker 5: pretty bad happened.

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Speaker 4: Then. I had read the gull Broth book, but sort.

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Speaker 5: Of beyond that, I was lacking details, And I honestly

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Speaker 5: I went on a vacation. It's like a nerdy vacation

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Speaker 5: thing to do. I downloaded some books to Kindle, and

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Speaker 5: I brought some more with me. All about nineteen twenty nine.

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Speaker 5: I sort of poured through them, and I thought to myself,

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Speaker 5: why can't I understand who the characters are, like the

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Speaker 5: people at a visceral level, like what were they saying

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Speaker 5: to each other? What were their motivations, were their incentives,

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Speaker 5: who was sleeping with who? What was really happening here?

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Speaker 5: And you know, I grew up sort of loving books

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Speaker 5: like that written by Michael Lewis or Jim Stewart.

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Speaker 3: With Denna Feeves you mentioned A Night to Remember or A.

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Speaker 5: Night to Remember with the Titanic was a great example

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Speaker 5: of a book that really sort of made things feel human.

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Speaker 5: And so I thought, you know what, could somebody, and

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Speaker 5: maybe it was me do that to nineteen twenty nine

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Speaker 5: and the youth was I wasn't sure I could that.

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Speaker 5: One of the reasons I think this took so long

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Speaker 5: was the entire time I wasn't sure. And when I

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Speaker 5: first started it, actually I mean started doing the research,

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Speaker 5: many of the archivists that I went to visit with

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Speaker 5: were like Andrew, we've read too Big to fail, that

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Speaker 5: kind of granular detail. It's just too hard to find.

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Speaker 5: And by the way, all the people are dead obviously,

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Speaker 5: so there's nobody in interview to you. You're really reliant

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Speaker 5: on letters and notes and memos and transcripts. And the

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Speaker 5: truth is, there wasn't like two or three or four

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Speaker 5: major archives you could sort of go excavate, and so

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Speaker 5: this turned into this sort of bizarre, years long project

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Speaker 5: of putting these puzzle pieces together.

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Speaker 3: I can only imagine how much archival research you had

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Speaker 3: to do for this book. It is very filled with

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Speaker 3: texture and personality and lots and lots of details. Is

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Speaker 3: there a particular character that kind of stuck out to

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Speaker 3: you in this book? I've read about Charles Mitchell. He's

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Speaker 3: sort of the villain, But then towards the end of it,

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Speaker 3: you have a sort of more nuanced opinion.

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Speaker 4: So I think there's a couple of characters.

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Speaker 5: And the truth is I would also say one other thing,

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Speaker 5: because I know we'll probably end up talking about today

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Speaker 5: like modern day today. When I started writing this book,

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Speaker 5: I never even thought about today. I was thinking really

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Speaker 5: about then. I didn't think I was.

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Speaker 2: Because if this is the top this year, you nailed

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Speaker 2: the time.

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Speaker 5: But as I was working on this, these characters to me,

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Speaker 5: like Charlie Mitchell, who ran a bank called National City

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Speaker 5: which becomes City Group, parallels to me between him. He

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Speaker 5: effectively invented sort of modern credit for lending, if you will,

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Speaker 5: to individuals to go and buy stock. I mean to me,

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Speaker 5: back then, he would have been as famous as a

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Speaker 5: Jamie Diamond of today. He might have been the Michael

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Speaker 5: Milken of his time. In certain ways. He might have

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Speaker 5: been even like a Dick Fold kind of character from

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Speaker 5: Lehman Brothers. So I was fascinated with Charlie Mitchell, and

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Speaker 5: he was actually one of the hardest characters to really

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Speaker 5: write because there really is no archive. He didn't keep

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Speaker 5: his own notes. It was really dependent on actually finding

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Speaker 5: other archives of letters and things that he participated in.

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Speaker 5: He was on the board of the New York Fed,

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Speaker 5: and I was able to get the minutes from those

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Speaker 5: FED meetings for the first time, and that really actually

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Speaker 5: sort of grounded the project. I became fascinated by John Raskob,

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Speaker 5: who to me is like Elon Musk in the nineteen twenties,

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Speaker 5: he was everywhere all the time. Philosopher King helped run

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Speaker 5: General Motors, really created credit at General Motors, which really

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Speaker 5: changed America. That's actually when people started taking on credit

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Speaker 5: for the first time. Goes on to play the market,

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Speaker 5: goes on to get involved in politics. He actually tried

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Speaker 5: to undermine Hoover's reputation in sort of a Musky kind

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Speaker 5: of way, if you will, and then goes to build

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Speaker 5: what was then the equivalent of a spaceship in the

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Speaker 5: Empire State Building. And meanwhile, I don't know if he

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Speaker 5: gets credit for it, if he really did to some

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Speaker 5: degree come up with the idea at least or became

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Speaker 5: an advocate for a five day work week in America.

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Speaker 5: People forget there were six days back then, And he

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Speaker 5: thought it was an would be an economic boon because.

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Speaker 3: People would have to go and spend your money.

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Speaker 5: Go spend money, they'll buy cars, they'll have to go play,

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Speaker 5: they'll have time to go places, do all sorts. So

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Speaker 5: I thought he was fascinating. And then the last person

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Speaker 5: carter Glass carter Glass to a glass degal fame. He

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Speaker 5: was a senator in Virginia, by the way, helped create

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Speaker 5: the bill that led to the creation of the Federal Reserve.

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Speaker 5: But he was the Elizabeth Warren of his time, and

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Speaker 5: he used to rail for years about this thing called

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Speaker 5: Mitchellism and this idea that Charlie Mitchell and the creation

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Speaker 5: of debt and leverage in the system was what was

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Speaker 5: gonna undo it.

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Speaker 4: The gold Brief.

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Speaker 2: Book talks a lot about the I guess what were

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Speaker 2: they that it was before mutual funds. What were they called?

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Speaker 2: The trust?

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Speaker 4: The investment trust, the investment trust.

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Speaker 2: But your book talks a lot about this idea of

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Speaker 2: like retail leverage basically which were you described and you

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Speaker 2: talk about they would say, okay, we've tadd people that

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Speaker 2: they can buy a car on margin, or a car

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Speaker 2: on credit, or a dishwasher, why not a stock And

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Speaker 2: it seems like they really trans a lot of people

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Speaker 2: in industry really sort of transported this consumer notion that

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Speaker 2: was nascent and just like, yeah, let's pourt it over.

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Speaker 5: I didn't appreciate that back then. I mean, brokerages were

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Speaker 5: springing up on the corners of the streets. The way

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Speaker 5: they're like Starbucks in New York.

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Speaker 4: It was really fun.

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Speaker 2: I always think about these physical or like the brokerage

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Speaker 2: on a cruise. Wouldn't be fun to just walk in

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Speaker 2: and play the market.

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Speaker 3: You mentioned lounges in like hotels, women only stock trading launches,

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Speaker 3: which you know, I would go for those. Nowadays, they

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Speaker 3: don't have to be women only, but just a place.

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Speaker 5: Every thing that was nuts, though, is you would show

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Speaker 5: up and you could give them a dollar and they

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Speaker 5: would literally lend you ten. I mean, that's what we're

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Speaker 5: talking about. And so when the market was going up,

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Speaker 5: it really was like free money. And I think this

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Speaker 5: was the first time this is ever really happening, and

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Speaker 5: so people didn't fully appreciate all the things that were possible.

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Speaker 3: There's another parallel with today, which is a lot of

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Speaker 3: the stock market being driven by AI, right, And when

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Speaker 3: people talk about the market opportunity in AI, it's basically uncapped.

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Speaker 3: It's the entire world. It's like all of business. And

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Speaker 3: in the nineteen twenties, people were saying stocks were going

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Speaker 3: to go up because the entire world was buying into

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Speaker 3: the US.

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Speaker 4: I think that's very true.

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Speaker 5: I would actually specifically point actually to a technology story

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Speaker 5: back then, which was radio Radio. The ticker symbol was Radio,

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Speaker 5: the company was RCA. They also, by the way, not

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Speaker 5: only had the technology for radio, they had the patents

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Speaker 5: for television and that was the Nvidia. I mean, that

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Speaker 5: was the meme stock of that era, because people were

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Speaker 5: buying into this future that we were all going to experience,

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Speaker 5: and they wouldn't have been wrong.

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Speaker 4: By the way.

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Speaker 5: The conundrum is, I think the stock split adjusted at

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Speaker 5: the peak was like got to five hundred and thirty

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Speaker 5: SOMEID dollars and by nineteen thirty two was like three dollars.

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Speaker 2: So one thing I was, you know, obviously when radio

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Speaker 2: comes to RCA, you're like, oh, it's the video of

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Speaker 2: the time. In video makes a ton of money, and

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Speaker 2: it makes more money every year. We'll see. We don't

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Speaker 2: know how sustainable that is, because some of that is

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Speaker 2: them investing in companies which come back and buy in video.

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Speaker 4: But setting that aside vendor financing.

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Speaker 2: Was RCA making a ton of money or was it

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Speaker 2: mostly excitement about the future. Do we have Radio's financials

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Speaker 2: from the twenties.

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Speaker 5: So the bad news is we don't. In fact, somebody

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Speaker 5: said to me the other day, did you ever get

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Speaker 5: a chance to look at the prospectuses of these stocks.

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Speaker 5: And I said prospectuses. They hardly had leaflets. I mean,

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Speaker 5: and that's if they had anything. They literally would be

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Speaker 5: leaflets that they would handle.

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Speaker 2: Other pes ratios going the period.

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Speaker 5: It was very hard to get real information. Again, this

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Speaker 5: is pre the creation of the SEC. The kind of

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Speaker 5: rules and regulations and just disclosures just didn't exist in

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Speaker 5: the same way that they do today.

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Speaker 3: So would you just get like a check in the

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Speaker 3: mail for a dividend every once in a while, Like

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Speaker 3: what access did you actually have?

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Speaker 5: So my understanding is that you would get a check

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Speaker 5: in the mail. In fact, oftentimes they wouldn't come in

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Speaker 5: the mail. You'd actually go to the brokerage house itself,

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Speaker 5: and in some cases they would keep that for you

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Speaker 5: and sometimes either reinvest it or keep it on like

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Speaker 5: a ledger, if you will.

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Speaker 4: But I don't know the.

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Speaker 5: Specifics exactly of how you would deal with your dividend

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Speaker 5: when and if you got it.

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Speaker 2: One thing I really like in the book is all

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Speaker 2: these different characters from American from world history, you telling

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Speaker 2: the story of them getting really obsessed with the stock market.

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Speaker 2: So Winston Churchill, on an early trip to the United

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Speaker 2: States gets really into margin trading. I think, like you

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Speaker 2: talk about growd show Mary and getting really insane.

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Speaker 4: To me, that was also like a great surprise.

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Speaker 2: That was also not something I'd read about.

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Speaker 5: I had no idea that Winston Churchill shows up in

257
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Speaker 5: New York actually have been the US even before this,

258
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Speaker 5: But in New York in October of nineteen twentyine he

259
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Speaker 5: was actually down on the floor of the Stock Exchange

260
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Speaker 5: visiting while this was all happening. He was totally engrossed

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Speaker 5: in trading. He was trying to make mine. He ends

262
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Speaker 5: up losing money, of course, like everybody else. He ends

263
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Speaker 5: up going to a dinner with all the leading bankers

264
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Speaker 5: the night that the market completely and utterly tanks. And similarly,

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Speaker 5: I didn't know about it either. But you know, Groucho

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Speaker 5: Marx was living in Long Island, and basically I shouldn't

267
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Speaker 5: say he was living on island, but he was recording

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Speaker 5: to his son. He was really living at a brokerage house,

269
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Speaker 5: trying to retape every day, and he ends up having

270
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Speaker 5: to mortgages home to pay for the margin calls when

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Speaker 5: they called.

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Speaker 3: Some people did make money. Going back to our intro,

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Speaker 3: very few people managed to make money, but some of

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Speaker 3: them did, and spectacular amounts. Can you talk a little

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Speaker 3: bit about Jesse Livermore.

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Speaker 5: The great Jesse Livre. There's been a lot written about

277
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Speaker 5: Jesse Livermore. Just delivering more is a arter in this book.

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Speaker 5: Of course, I don't know if we should give away

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Speaker 5: the ending for those who don't know, but Jesse Liveringwore

280
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Speaker 5: ultimately shoots himself in the head at nineteen forty one

281
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Speaker 5: over at the Sherry Netherlands.

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Speaker 3: Shooting themselves in the head.

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Speaker 5: In this book, there's a lot of shooting, jumping out

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Speaker 5: windows and other things. But you know, Jesse was a

285
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Speaker 5: short seller, and he was spectacularly successful in the crash itself.

286
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Speaker 5: The truth was, though he had been super successful in

287
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Speaker 5: parts of the twenties, and then was actually quite a

288
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Speaker 5: failure in most of twenty seven and twenty eight and

289
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Speaker 5: twenty nine because the market kept going up and he

290
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Speaker 5: was almost out of business. And then he goes back

291
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Speaker 5: in in the fall of twenty nine and makes something

292
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Speaker 5: like one hundred million dollars plus. But of course, like

293
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Speaker 5: I think any of these sort of super emotionally complicated people,

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Speaker 5: he ultimately loses it, I mean quickly, and then you know,

295
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Speaker 5: makes makes a little bit more, loses a little bit more,

296
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Speaker 5: makes a little bit more, and then this is well everything.

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Speaker 2: You said that when you started this book. It started

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Speaker 2: a decade ago, so it is not about some attempt

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Speaker 2: to make a parallel today, even though the timing may

300
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Speaker 2: things are very crazy these days. Many people would say,

301
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Speaker 2: I've always been curious about this, Chris. When I read

302
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Speaker 2: history of any sort, the brain can't help but try

303
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Speaker 2: to find parallels to the present. I think, at least

304
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Speaker 2: for me, it's like, oh, this is just like this,

305
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Speaker 2: just like this. When you're doing the process of writing history,

306
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Speaker 2: do you have any mechanisms in place to avoid the

307
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Speaker 2: temptation to sort of overdraw parallels, because that must be

308
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Speaker 2: incredibly tempting to find the details that feel salient and

309
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Speaker 2: similar today. This is the Nvidia of the time, This

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Speaker 2: is the Kathy word of the time, this is whatever.

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Speaker 4: So yes and no.

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Speaker 5: I think it wasn't until two years ago when I

313
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Speaker 5: was getting closer to being finished and also sort of

314
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Speaker 5: recognizing what was happening in the moment today, and the

315
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Speaker 5: parallel started to seem clearer and closer. So three and

316
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Speaker 5: four years ago, actually it didn't feel as similar, oddly enough.

317
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Speaker 5: But all of a sudden, you're starting to see these

318
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Speaker 5: debates that they're having in literally the spring of nineteen

319
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Speaker 5: twenty nine about whether to raise or lower interest rates,

320
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Speaker 5: and how they're going to try to end speculation within

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Speaker 5: the New York Fed and to some degree the political

322
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Speaker 5: pressures that are around them, And you start to say yourself, well,

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Speaker 5: that seems kind of I've been hearing a lot about that,

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Speaker 5: so I hesitated to sort of overdo it. But I

325
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Speaker 5: also was cognizant that I imagined readers who were reading it

326
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Speaker 5: might think about some of these things. And one of

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Speaker 5: the decisions we made in particular, I remember having lots

328
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Speaker 5: of debates with my editor about was nowhere in the

329
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Speaker 5: book did we ever want to stop the reader and

330
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Speaker 5: take you out of nineteen twentynine and say, hey, by

331
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Speaker 5: the way, this is kind of like that, or this

332
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Speaker 5: is kind of like that. Some readers may see these

333
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Speaker 5: parallels or different things themselves, some may never see them,

334
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Speaker 5: and some may come up with completely different parallels.

335
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Speaker 4: And I would love that.

336
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Speaker 3: Frankly, I have a parallel. Okay, something that happened slightly

337
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Speaker 3: after the crash is smoot Holly right. The tariffs, and

338
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Speaker 3: today we're in the Trump administration with very broad, widespread tariffs.

339
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Speaker 5: Yeah, that wasn't on my bingo card when I was

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Speaker 5: writing that originally.

341
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Speaker 3: I'm curious how much of the subsequent Great Depression would

342
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Speaker 3: you attribute to those sorts of economic policies versus the

343
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Speaker 3: stock market crash itself.

344
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Speaker 5: So I actually think there was a lot of bad

345
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Speaker 5: decisions and dominoes that came after the crash itself that

346
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Speaker 5: really is what put us into the Great Depression. So

347
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Speaker 5: I look at the crash and really only the first

348
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Speaker 5: half of this book is about the crash itself as

349
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Speaker 5: sort of the first domino of a series of things

350
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Speaker 5: that were sort of the necessary ingredients to create the depression. So,

351
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Speaker 5: you know, when you think about all of the bad decisions,

352
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Speaker 5: the tariffs are one of those decisions, the idea that

353
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Speaker 5: Andrew Mellon, who is our Treasury secretary, who was effectively saying,

354
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Speaker 5: let these capitalists eat it. They were speculating, let them suffer.

355
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Speaker 5: You know, when you think about the fact that the

356
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Speaker 5: FED really did very little at the time and almost

357
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Speaker 5: sat on their hands in large part, I would argue,

358
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Speaker 5: because the FED was such a new institution, people forget

359
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Speaker 5: who was born in nineteen thirteen, that they were cognizant.

360
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Speaker 4: Of the political pressures.

361
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Speaker 5: If they were seen, they couldn't have pulled off a

362
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Speaker 5: voker like moved. They knew there were speculation, but if

363
00:17:31,400 --> 00:17:33,560
Speaker 5: they had said, Okay, we're going to really just raise

364
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Speaker 5: interest rates, by the way, it wasn't that we're going

365
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Speaker 5: to lose their jobs. I think they actually feared that

366
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Speaker 5: maybe there wouldn't be a FED. So I think there

367
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Speaker 5: was sort of the consonance of all of these different

368
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Speaker 5: things we talked about the gold standard. I mean, there's

369
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Speaker 5: sort of a series of things that take place that

370
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Speaker 5: lead eventually to nine thousand banks going out of business

371
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Speaker 5: and unemployment at twenty five percent.

372
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Speaker 2: It's interesting speaking of the FED because these days there's

373
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Speaker 2: all this question of like we're looking at financial condition,

374
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Speaker 2: at real economy, et cetera. It's interesting how maybe the

375
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Speaker 2: FED didn't do enough to curb speculation, or maybe at

376
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Speaker 2: some point didn't do enough to counteract the downturn. But

377
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Speaker 2: they were very keyed into the rate on margin lending

378
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Speaker 2: as one of their main tools that they had in

379
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Speaker 2: their toolkit.

380
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Speaker 4: So that was their big tool, or what they thought

381
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Speaker 4: was their.

382
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Speaker 5: Tool However, they didn't really use it, and so you

383
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Speaker 5: had this sort of fascinating debate happening in the spring

384
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Speaker 5: of nineteen twenty nine, when they're sitting there saying, there's

385
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Speaker 5: too much speculation.

386
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Speaker 4: We need to end the speculation. How do we do that?

387
00:18:35,680 --> 00:18:38,760
Speaker 5: Well, the decision they came to, effectively was to send

388
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Speaker 5: out letters to banks saying, please stop lending to speculators,

389
00:18:43,320 --> 00:18:46,960
Speaker 5: to which the banker said, what are you talking about?

390
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Speaker 5: How you define what a speculator is? What what isn't one?

391
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Speaker 5: Some of the banks were so scared that they effectively

392
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Speaker 5: stopped lending. That, unto itself, was a problem. And then

393
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Speaker 5: you had people like Charlie Mitchell, who, by the way,

394
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Speaker 5: in that moment you would have compared to Donald Trump

395
00:18:59,359 --> 00:19:03,080
Speaker 5: saying actually lower interest rates please. So I think there

396
00:19:03,119 --> 00:19:05,920
Speaker 5: was this sort of fascinating dynamic that you could sort

397
00:19:05,920 --> 00:19:09,080
Speaker 5: of see play out. Again, these are some of the details.

398
00:19:09,080 --> 00:19:12,280
Speaker 5: I don't think I understood the texture of what really

399
00:19:12,359 --> 00:19:13,119
Speaker 5: led to all of this.

400
00:19:13,560 --> 00:19:16,760
Speaker 3: There's another parallel, speaking of the FED. This might be

401
00:19:17,040 --> 00:19:19,919
Speaker 3: pressing it or stretching it a little bit, but I

402
00:19:19,960 --> 00:19:23,720
Speaker 3: get the sense that nowadays people feel that the FED

403
00:19:23,800 --> 00:19:26,280
Speaker 3: can come up with any solution to any problem.

404
00:19:26,359 --> 00:19:26,520
Speaker 4: Right.

405
00:19:26,520 --> 00:19:29,440
Speaker 3: We've seen them roll out tons and tons of different programs,

406
00:19:29,480 --> 00:19:33,240
Speaker 3: whether it's for corporate credit or repo treasuries, that sort

407
00:19:33,280 --> 00:19:36,760
Speaker 3: of thing. In the nineteen twenties, there was a sense

408
00:19:37,160 --> 00:19:40,520
Speaker 3: that America had beaten the boom bus cycle, right, because

409
00:19:40,560 --> 00:19:44,520
Speaker 3: there was another crash previously, which was nineteen oh seven.

410
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Speaker 5: Look again, I think this is one of those things

411
00:19:48,080 --> 00:19:52,720
Speaker 5: where because of the nineteen oh seven experience, which by

412
00:19:52,760 --> 00:19:55,600
Speaker 5: the way, was solved effectively by JP Morgan taking a

413
00:19:55,640 --> 00:19:58,359
Speaker 5: bunch of bankers and trapping them in a room until

414
00:19:58,359 --> 00:19:59,840
Speaker 5: they could figure out what they were going to do,

415
00:20:00,960 --> 00:20:03,760
Speaker 5: led to a sort of sense of overconfidence, and not

416
00:20:03,840 --> 00:20:07,919
Speaker 5: just overconfidence, a sense among certain men, men of a

417
00:20:07,960 --> 00:20:11,000
Speaker 5: certain group, if you will, that if you could just

418
00:20:11,280 --> 00:20:14,200
Speaker 5: put the right people in a room together, we could

419
00:20:14,200 --> 00:20:18,880
Speaker 5: solve anything. Thomas Lamont was effectively running JP Morgan during

420
00:20:18,880 --> 00:20:22,000
Speaker 5: this period. JP Morgan himself had died. His son Jack

421
00:20:22,240 --> 00:20:26,320
Speaker 5: was the CEO in name, but really Thomas was running things,

422
00:20:26,640 --> 00:20:29,399
Speaker 5: and he was one of those kind of believers. But

423
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Speaker 5: I think that nineteen twenty nine and what happened in

424
00:20:32,520 --> 00:20:35,119
Speaker 5: the markets just got so far away from them that

425
00:20:35,200 --> 00:20:37,840
Speaker 5: they realized that there was nothing, ultimately in the end

426
00:20:37,920 --> 00:20:40,720
Speaker 5: they could do, and they didn't know that until Lewis

427
00:20:40,760 --> 00:20:41,080
Speaker 5: too late.

428
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Speaker 2: So nineteen oh seven, literally one hundred years before our crash,

429
00:20:46,160 --> 00:20:48,760
Speaker 2: the Great financial crisis that leading to all of this

430
00:20:48,840 --> 00:20:51,960
Speaker 2: overconfidence that there is just an endless series of tools

431
00:20:52,119 --> 00:20:54,160
Speaker 2: that the government has to stop anything.

432
00:20:54,560 --> 00:20:57,560
Speaker 4: And then we get you're making your own power. It's

433
00:20:57,600 --> 00:20:58,760
Speaker 4: how do you not? How do you?

434
00:20:58,840 --> 00:20:59,800
Speaker 3: How can the brain?

435
00:21:00,160 --> 00:21:02,360
Speaker 2: And I don't even like, I'm not even arguing there's

436
00:21:02,359 --> 00:21:04,960
Speaker 2: a parallel. I just think that the brain naturally sees

437
00:21:05,040 --> 00:21:07,919
Speaker 2: these things and we can't avoid it. Maybe, by the way,

438
00:21:07,960 --> 00:21:09,840
Speaker 2: we'ren't twenty five, so we still have four years.

439
00:21:10,040 --> 00:21:10,600
Speaker 1: Four four years.

440
00:21:11,400 --> 00:21:13,639
Speaker 2: That's not financial advice, but four years are going to

441
00:21:13,680 --> 00:21:13,919
Speaker 2: try and.

442
00:21:13,880 --> 00:21:14,480
Speaker 4: Make my money?

443
00:21:15,359 --> 00:21:17,720
Speaker 2: Wait, maybe this I'm gonna ask you. I don't know

444
00:21:17,760 --> 00:21:19,600
Speaker 2: if there's you may not even want to answer that.

445
00:21:19,720 --> 00:21:21,480
Speaker 2: This could be like a really good movie or TV

446
00:21:21,520 --> 00:21:22,240
Speaker 2: show on Netflix.

447
00:21:22,320 --> 00:21:24,439
Speaker 3: Oh yeah, yes, I thought it's very.

448
00:21:24,320 --> 00:21:27,320
Speaker 2: Guilded, gilded. Yeah I had that thought too. You gonna

449
00:21:27,359 --> 00:21:28,480
Speaker 2: can you give us a little news here?

450
00:21:28,600 --> 00:21:30,680
Speaker 4: I don't have any news for you, you know, co

451
00:21:30,880 --> 00:21:31,879
Speaker 4: creator of Billions.

452
00:21:32,040 --> 00:21:35,800
Speaker 5: Happily, there's a bunch of folks in Hollywood who've been

453
00:21:35,800 --> 00:21:39,520
Speaker 5: reaching out recently, and there's some conversations going on, but

454
00:21:39,960 --> 00:21:42,400
Speaker 5: no news, and I you know, one of those cross

455
00:21:42,400 --> 00:21:43,119
Speaker 5: your fingers kind we.

456
00:21:43,119 --> 00:21:45,000
Speaker 2: Could officially say that we think it would be a

457
00:21:45,000 --> 00:21:45,400
Speaker 2: good show.

458
00:21:45,520 --> 00:21:47,480
Speaker 3: We want cameos, we want cameos.

459
00:21:47,760 --> 00:21:50,920
Speaker 5: We can organize that this is a period piece, so

460
00:21:50,960 --> 00:21:51,600
Speaker 5: we're gonna have to.

461
00:21:51,720 --> 00:21:52,280
Speaker 3: I love it.

462
00:21:52,640 --> 00:21:58,600
Speaker 2: Tracy could be the astrologer that hangs out stock tips

463
00:21:58,600 --> 00:22:00,640
Speaker 2: based about.

464
00:22:00,400 --> 00:22:03,879
Speaker 5: That, So you're talking about Evangeline Adams. She was an

465
00:22:03,920 --> 00:22:08,760
Speaker 5: astrologer and an astrologer who was taken shockingly seriously at

466
00:22:08,760 --> 00:22:12,320
Speaker 5: that time by all sorts of financiers. Before he died.

467
00:22:12,400 --> 00:22:15,800
Speaker 5: JP Morgan himself was famous for going to visit with her.

468
00:22:16,400 --> 00:22:20,000
Speaker 5: She had an office in Carnegie Hall and she would

469
00:22:20,160 --> 00:22:23,480
Speaker 5: literally sit inside the Plaza Hotel and people would come

470
00:22:23,520 --> 00:22:25,840
Speaker 5: up and talk to her and visit with Jenner newsletter

471
00:22:26,320 --> 00:22:29,439
Speaker 5: and then, by the way, interestingly, in October of nineteen

472
00:22:29,480 --> 00:22:32,560
Speaker 5: twenty nine, as the market is crashing and people don't

473
00:22:32,600 --> 00:22:35,399
Speaker 5: always appreciate the crash really happened over several days. It

474
00:22:35,440 --> 00:22:38,920
Speaker 5: was not just one bad day. She would have these

475
00:22:38,960 --> 00:22:42,919
Speaker 5: almost like seances where people would come to her office,

476
00:22:43,240 --> 00:22:44,880
Speaker 5: and she wasn't doing one on ones at that point

477
00:22:44,880 --> 00:22:46,680
Speaker 5: because the groups were so big.

478
00:22:47,440 --> 00:22:50,120
Speaker 3: She was summoning the animal spirits, yes.

479
00:22:49,840 --> 00:22:54,560
Speaker 5: And she was praying for, of course, for high stock prices. Interestingly,

480
00:22:55,359 --> 00:22:57,479
Speaker 5: she got a lot of credit for the stock market

481
00:22:57,480 --> 00:23:01,760
Speaker 5: boom because in the fall of twenty nine, I think

482
00:23:01,840 --> 00:23:05,199
Speaker 5: right after Labor Day in September, a reporter called her

483
00:23:05,200 --> 00:23:07,560
Speaker 5: and asked her what was in the stars. Of course,

484
00:23:07,800 --> 00:23:09,840
Speaker 5: she told everybody that the market was going.

485
00:23:09,800 --> 00:23:10,240
Speaker 4: To go up.

486
00:23:10,480 --> 00:23:13,680
Speaker 3: Yeah, there's another thing that you write about in your book,

487
00:23:13,720 --> 00:23:16,879
Speaker 3: which again could be a potential parallel, which is I

488
00:23:16,880 --> 00:23:20,200
Speaker 3: guess the role of technology back then. And I'm thinking

489
00:23:20,240 --> 00:23:24,440
Speaker 3: about the recent banking crisis mini drama, whatever you want

490
00:23:24,440 --> 00:23:26,760
Speaker 3: to call it, where you know, rumors about the health

491
00:23:26,800 --> 00:23:30,200
Speaker 3: of the bank flew around really really quickly on social

492
00:23:30,320 --> 00:23:33,000
Speaker 3: media and in private chat groups and things like that,

493
00:23:33,560 --> 00:23:36,240
Speaker 3: and some people thought that contributed to a lot of

494
00:23:36,280 --> 00:23:41,240
Speaker 3: the problems in the nineteen twenty nine crash. How quickly

495
00:23:41,320 --> 00:23:45,760
Speaker 3: did information disseminate and how quickly were the share price

496
00:23:45,880 --> 00:23:51,320
Speaker 3: drops actually, you know, reflected on the exchanges and communicated

497
00:23:51,320 --> 00:23:52,880
Speaker 3: to other people glacially.

498
00:23:53,760 --> 00:23:57,040
Speaker 5: So one of the big technological problems in nineteen twenty

499
00:23:57,160 --> 00:24:00,159
Speaker 5: nine was that the quote unquote big board the New

500
00:24:00,200 --> 00:24:05,359
Speaker 5: York Stock Exchange would often fall behind literally by hours.

501
00:24:05,920 --> 00:24:08,479
Speaker 5: So you could be looking at the board thinking that,

502
00:24:08,560 --> 00:24:10,439
Speaker 5: you know what the score is, if you will, what

503
00:24:10,480 --> 00:24:13,359
Speaker 5: the crisis of the stock is, but it would literally

504
00:24:13,400 --> 00:24:18,000
Speaker 5: be hours off. And that's if you're physically on the

505
00:24:18,040 --> 00:24:21,040
Speaker 5: floor of the exchange. The folks on the floor were

506
00:24:21,080 --> 00:24:23,600
Speaker 5: then calling all the brokerage houses around the country and

507
00:24:23,640 --> 00:24:26,840
Speaker 5: even uptown in New York to tell them what the

508
00:24:26,920 --> 00:24:29,000
Speaker 5: numbers were in there, so their numbers were hopelessly out

509
00:24:29,000 --> 00:24:31,920
Speaker 5: of date. And you know, when you see pictures of

510
00:24:32,119 --> 00:24:35,320
Speaker 5: you know, thousands of people on the streets of Wall Street,

511
00:24:35,359 --> 00:24:37,919
Speaker 5: those famous pictures in October of nineteen twenty nine, the

512
00:24:38,040 --> 00:24:39,720
Speaker 5: reason there were so many people in the streets is

513
00:24:39,760 --> 00:24:42,919
Speaker 5: people had gone down there physically because they wanted to

514
00:24:42,960 --> 00:24:46,480
Speaker 5: see what was actually happening to their investments. Because you

515
00:24:46,520 --> 00:24:49,120
Speaker 5: couldn't call somebody, there was no app to look at,

516
00:24:49,640 --> 00:24:54,480
Speaker 5: and that, unto itself, created a real dilemma putting aside

517
00:24:54,480 --> 00:24:54,959
Speaker 5: what was going on.

518
00:24:55,000 --> 00:24:56,120
Speaker 4: By the way, on.

519
00:24:55,960 --> 00:24:59,000
Speaker 5: Some of these boats, you know, people were trading on boats.

520
00:24:59,119 --> 00:25:02,200
Speaker 5: Those guys were you know, half the day a day.

521
00:25:03,040 --> 00:25:05,920
Speaker 3: They're sending pigeon carriers for the latest stock price.

522
00:25:06,160 --> 00:25:10,160
Speaker 2: Well, Jesse livermore like he had his own phone lines, right,

523
00:25:10,320 --> 00:25:12,520
Speaker 2: he was sort of like, as they sitadet, I was

524
00:25:12,600 --> 00:25:14,960
Speaker 2: literally going to say, who's the Ken Griffin setting up

525
00:25:15,000 --> 00:25:17,600
Speaker 2: a sate light in his dorm or any one of

526
00:25:17,640 --> 00:25:20,159
Speaker 2: these people who later on tried to get a faster

527
00:25:20,320 --> 00:25:23,000
Speaker 2: line to the exchange with microwave towers. He did that

528
00:25:23,040 --> 00:25:23,640
Speaker 2: with phone lines.

529
00:25:23,680 --> 00:25:25,719
Speaker 5: He did with phone lines and his own people literally

530
00:25:25,760 --> 00:25:28,479
Speaker 5: down on the floor that were then calling in the

531
00:25:28,520 --> 00:25:31,840
Speaker 5: bids back to his office so that he would have

532
00:25:31,920 --> 00:25:34,080
Speaker 5: better information than other people.

533
00:25:34,240 --> 00:25:37,440
Speaker 3: Phone lines were the Lindy latency of the time. Yeah,

534
00:25:37,480 --> 00:25:55,520
Speaker 3: they were, That's what I said. Okay, another parallel. I'm

535
00:25:55,520 --> 00:25:59,280
Speaker 3: just going to throw out and you can agree or disagree.

536
00:25:58,960 --> 00:26:00,000
Speaker 2: To Andrew a circle of them.

537
00:26:00,359 --> 00:26:02,720
Speaker 3: Oh, there you go. Was there an Andrew ross Orkin

538
00:26:02,800 --> 00:26:03,240
Speaker 3: of the time.

539
00:26:03,480 --> 00:26:06,480
Speaker 5: Well, there was an Alexander Noyes was the business editor

540
00:26:06,840 --> 00:26:10,040
Speaker 5: of the New York Times, and he was pretty respected guy.

541
00:26:10,359 --> 00:26:12,639
Speaker 5: So I think that would have been I would I

542
00:26:12,640 --> 00:26:17,040
Speaker 5: would take that interestingly. There was a retort the time,

543
00:26:17,600 --> 00:26:22,399
Speaker 5: Walter Lippman. Oh you know so, Walter, So Walter Lippman

544
00:26:22,520 --> 00:26:26,520
Speaker 5: was a very interesting journalist because he was he was

545
00:26:26,640 --> 00:26:30,000
Speaker 5: very inside. He had a very close relationship with Thomas

546
00:26:30,080 --> 00:26:32,680
Speaker 5: Lamont at JP Morgan. Some people might have said back

547
00:26:32,720 --> 00:26:37,320
Speaker 5: then afterwards, too close. He then turned around though actually

548
00:26:37,800 --> 00:26:39,600
Speaker 5: after a lot of these things emerged and sort of

549
00:26:39,800 --> 00:26:42,840
Speaker 5: really went after them. So I don't know there was

550
00:26:42,880 --> 00:26:45,560
Speaker 5: a but the other thing, I should say, we as

551
00:26:45,600 --> 00:26:49,880
Speaker 5: a group, meaning the journalistas, did not cover ourselves in glory,

552
00:26:50,080 --> 00:26:51,719
Speaker 5: in part because a lot of these people were being

553
00:26:51,760 --> 00:26:55,919
Speaker 5: paid off physically, like with cash. I mean talk about manipulation.

554
00:26:56,080 --> 00:26:59,320
Speaker 5: There were no insider trading laws. People were literally going

555
00:26:59,400 --> 00:27:01,160
Speaker 5: up to reporter forget about taking them at a dinner.

556
00:27:01,200 --> 00:27:03,840
Speaker 5: They were saying, here's money, and please write an article

557
00:27:03,920 --> 00:27:07,040
Speaker 5: saying such a such stock is bound to move higher

558
00:27:07,040 --> 00:27:09,280
Speaker 5: tomorrow because some rumor.

559
00:27:09,440 --> 00:27:13,280
Speaker 3: Okay, so another parallel, just keep going. People talk about

560
00:27:13,320 --> 00:27:16,080
Speaker 3: AI nowadays and you see these charts of these sort

561
00:27:16,119 --> 00:27:18,959
Speaker 3: of I always say, it's an incestuous relationship between all

562
00:27:19,000 --> 00:27:21,600
Speaker 3: the different AI companies, where so and so is buying

563
00:27:21,680 --> 00:27:24,560
Speaker 3: from this company and then they're lending to this company,

564
00:27:24,640 --> 00:27:26,960
Speaker 3: and it all kind of comes full circle. When you

565
00:27:26,960 --> 00:27:29,840
Speaker 3: think about the nineteen twenty nine crash. A lot of

566
00:27:29,840 --> 00:27:33,440
Speaker 3: it was, you know, businesses issuing stock in order to

567
00:27:33,480 --> 00:27:37,359
Speaker 3: borrow money in order to invest in more stocks. Any

568
00:27:37,400 --> 00:27:40,240
Speaker 3: similarities there, that's sort of self I think it's very

569
00:27:40,240 --> 00:27:41,159
Speaker 3: circular dealing.

570
00:27:41,359 --> 00:27:43,920
Speaker 5: Well, if you think about these investment trusts, there were

571
00:27:43,920 --> 00:27:46,159
Speaker 5: so many investment trusts that turned into sort of leverage

572
00:27:46,200 --> 00:27:49,119
Speaker 5: upon leverage. They were like Russian dolls of leverage and

573
00:27:49,160 --> 00:27:52,320
Speaker 5: you didn't really even know what was inside of them.

574
00:27:52,760 --> 00:27:55,440
Speaker 4: I don't know if I can look at fully at.

575
00:27:55,400 --> 00:27:57,280
Speaker 5: The AI companies like that just yet, though I think

576
00:27:57,320 --> 00:27:59,879
Speaker 5: there are probably certain types of deals in vendor financings

577
00:28:00,200 --> 00:28:03,520
Speaker 5: of arrangements that should be raising questions.

578
00:28:04,119 --> 00:28:04,960
Speaker 4: But you could look at.

579
00:28:04,840 --> 00:28:07,639
Speaker 5: The world of crypto actually you could look at you know,

580
00:28:07,760 --> 00:28:11,240
Speaker 5: Strategy Group is an interesting I mean, is Strategy is

581
00:28:11,320 --> 00:28:13,480
Speaker 5: like an investment trust. That's actually what it is. A

582
00:28:13,520 --> 00:28:16,080
Speaker 5: lot of these trusts that are emerging, that's what they are.

583
00:28:16,640 --> 00:28:19,879
Speaker 2: The question for the firstwhile micro Strategy just people for

584
00:28:19,920 --> 00:28:21,640
Speaker 2: people who haven't been paying attention to the name.

585
00:28:21,640 --> 00:28:25,920
Speaker 5: Yeah, formerly micro Strategy Michael Saylor. And so there are

586
00:28:26,040 --> 00:28:28,840
Speaker 5: these businesses that have similarities. Again, I don't want to

587
00:28:28,840 --> 00:28:31,600
Speaker 5: tell you that Strategy sure is in nineteen twenty nine

588
00:28:31,680 --> 00:28:33,200
Speaker 5: style investment trust per se.

589
00:28:33,359 --> 00:28:36,480
Speaker 2: I don't know, I'm said in the intro, You're like,

590
00:28:36,600 --> 00:28:39,560
Speaker 2: have all these affiliations, you're still doing deal Book all

591
00:28:39,600 --> 00:28:40,360
Speaker 2: of this other stuff.

592
00:28:40,400 --> 00:28:41,680
Speaker 3: Like what dude, we go up.

593
00:28:41,640 --> 00:28:44,960
Speaker 2: Together, You're like, what is your because you're still doing

594
00:28:45,000 --> 00:28:46,680
Speaker 2: all of that. I've like paired back a bunch of them.

595
00:28:46,720 --> 00:28:49,360
Speaker 2: I don't do TV anymore, etceter Like, what is your

596
00:28:49,440 --> 00:28:51,280
Speaker 2: like date? I used to wake up with you, and

597
00:28:51,320 --> 00:28:53,240
Speaker 2: I used to, but then I stopped because I got

598
00:28:53,280 --> 00:28:54,880
Speaker 2: tired and you didn't. So what I want to know

599
00:28:55,000 --> 00:28:57,440
Speaker 2: is like, tell me about what's the day like for

600
00:28:57,520 --> 00:28:59,080
Speaker 2: you these days? What are you up to?

601
00:28:59,200 --> 00:28:59,840
Speaker 4: So I wake up?

602
00:28:59,880 --> 00:29:05,280
Speaker 5: You see around four thirty ish, I usually do sort

603
00:29:05,280 --> 00:29:08,840
Speaker 5: of the final pass on some deal book stuff till

604
00:29:09,000 --> 00:29:10,760
Speaker 5: call it five ten.

605
00:29:10,880 --> 00:29:13,320
Speaker 4: Ish to just go straight to the computer.

606
00:29:13,800 --> 00:29:16,560
Speaker 5: Yes, oh straight, there's no, there's no, yes, no. When

607
00:29:16,560 --> 00:29:19,160
Speaker 5: the alarm goes off, up up, up, and then I

608
00:29:19,240 --> 00:29:24,040
Speaker 5: do squat box oftentimes still fixing things in deal Book

609
00:29:24,160 --> 00:29:27,760
Speaker 5: up until the bitter end, and that usually goes till

610
00:29:27,760 --> 00:29:31,200
Speaker 5: about nine. Often go on to Morning Joe, maybe talk

611
00:29:31,240 --> 00:29:35,440
Speaker 5: a little economics there, and then get back into deal

612
00:29:35,440 --> 00:29:38,640
Speaker 5: book land as we plan out the next day's newsletter,

613
00:29:39,360 --> 00:29:42,440
Speaker 5: and then in between all of that, try to write this.

614
00:29:42,600 --> 00:29:47,320
Speaker 5: And I have three kids and get involved in other

615
00:29:47,360 --> 00:29:49,960
Speaker 5: projects and things. So it's a busy day that doesn't

616
00:29:50,200 --> 00:29:52,240
Speaker 5: typically end till the end of the day.

617
00:29:52,400 --> 00:29:53,440
Speaker 3: What time do you go to bed?

618
00:29:53,560 --> 00:29:54,840
Speaker 4: I try to go to bed.

619
00:29:54,920 --> 00:29:58,000
Speaker 5: I try by nine thirty if I can be If

620
00:29:58,040 --> 00:29:59,200
Speaker 5: I can be in bed by nine.

621
00:29:59,080 --> 00:30:00,160
Speaker 4: Thirty, this can work.

622
00:30:00,280 --> 00:30:04,240
Speaker 5: Yeah, if it gets to ten or ten fifteen or anytime.

623
00:30:03,840 --> 00:30:05,280
Speaker 2: After that, that's going to be a rough day.

624
00:30:05,320 --> 00:30:07,000
Speaker 4: The next the next day is not a good day.

625
00:30:07,400 --> 00:30:09,560
Speaker 3: Okay. Well, one of the things you're known for is,

626
00:30:09,760 --> 00:30:11,479
Speaker 3: you know, you have a lot of access. You know

627
00:30:11,640 --> 00:30:14,280
Speaker 3: a lot of people. What are you hearing right now?

628
00:30:14,400 --> 00:30:16,440
Speaker 3: You don't have to name names, obviously, but what are

629
00:30:16,440 --> 00:30:19,880
Speaker 3: you hearing? General opinions about the market and maybe the

630
00:30:20,000 --> 00:30:22,480
Speaker 3: influence of policy from the Trump administration.

631
00:30:23,040 --> 00:30:23,680
Speaker 4: Oh goodness.

632
00:30:24,200 --> 00:30:29,640
Speaker 5: So I don't know any CEO right now that is

633
00:30:29,960 --> 00:30:34,600
Speaker 5: particularly thrilled with the Trump administration, per se. I think

634
00:30:34,880 --> 00:30:38,600
Speaker 5: that most CEOs I know are quite troubled by things

635
00:30:38,600 --> 00:30:42,920
Speaker 5: that the Trump administration is doing. You won't normally hear that,

636
00:30:43,040 --> 00:30:45,640
Speaker 5: with the exception of maybe Ken Griffin or somebody like

637
00:30:45,680 --> 00:30:49,320
Speaker 5: that who's been somewhat public about some things, but of

638
00:30:49,320 --> 00:30:53,240
Speaker 5: course sort of modulated on others. Having said that, I

639
00:30:53,280 --> 00:30:57,360
Speaker 5: think they love the idea of deregulation. I think the

640
00:30:57,440 --> 00:31:00,800
Speaker 5: folks in finance, by the way, love the idea of

641
00:31:01,440 --> 00:31:04,080
Speaker 5: some of the things that Trump is doing, even when

642
00:31:04,120 --> 00:31:07,560
Speaker 5: it comes to things like, you know, earnings reports. You know,

643
00:31:07,600 --> 00:31:09,560
Speaker 5: most CEOs I know say I don't want to have

644
00:31:09,560 --> 00:31:11,440
Speaker 5: to do earnings you know, four times a year. I'll

645
00:31:11,480 --> 00:31:15,200
Speaker 5: do that twice. You have a whole movement afoot. And

646
00:31:15,200 --> 00:31:16,720
Speaker 5: by the way, this is this to me is a

647
00:31:16,760 --> 00:31:19,680
Speaker 5: parallel nineteen twenties we talked about democratizing finance.

648
00:31:19,720 --> 00:31:21,240
Speaker 4: That was like a big concept.

649
00:31:21,760 --> 00:31:25,400
Speaker 5: Now, this whole idea of democratizing finance in the context

650
00:31:25,440 --> 00:31:28,400
Speaker 5: of putting private credit and private equity and venture capital

651
00:31:28,640 --> 00:31:32,480
Speaker 5: inside your retirement accounts and these sort of semi liquid

652
00:31:32,640 --> 00:31:35,440
Speaker 5: funds and things, that's very nineteen twenty nine is to me.

653
00:31:35,920 --> 00:31:38,320
Speaker 5: So I do think there are people who like that,

654
00:31:39,040 --> 00:31:42,720
Speaker 5: but I think there's still this sort of underlying adjuta.

655
00:31:42,840 --> 00:31:44,520
Speaker 2: Can you talk actually a little bit more about this

656
00:31:44,680 --> 00:31:47,080
Speaker 2: shattered a nation part of it? Like what is it?

657
00:31:47,120 --> 00:31:48,840
Speaker 2: I mean, there was a big downturn, we all know

658
00:31:48,840 --> 00:31:51,800
Speaker 2: about the Great Depression, did it threaten to rip apart

659
00:31:51,920 --> 00:31:53,720
Speaker 2: the country when it all ended well?

660
00:31:53,760 --> 00:31:56,680
Speaker 5: So I think it ultimately did come close to ripping

661
00:31:56,680 --> 00:31:58,960
Speaker 5: apart of the country. But I think even maybe more

662
00:31:58,960 --> 00:32:03,080
Speaker 5: powerfully ripped apart generationally a psyche. So I don't tell

663
00:32:03,080 --> 00:32:05,560
Speaker 5: the story in the book because I didn't know if

664
00:32:05,600 --> 00:32:07,800
Speaker 5: it was appropriate, but I'll tell it to you. My

665
00:32:07,920 --> 00:32:12,640
Speaker 5: grandfather was eleven years old, he's no longer alive in

666
00:32:12,800 --> 00:32:13,800
Speaker 5: nineteen twenty nine.

667
00:32:14,040 --> 00:32:15,680
Speaker 4: His brother was a messenger.

668
00:32:15,280 --> 00:32:19,440
Speaker 5: Boy, and he was down there in October of ninet

669
00:32:19,400 --> 00:32:20,920
Speaker 5: twenty one. He used to tell the story, and he

670
00:32:21,000 --> 00:32:24,120
Speaker 5: was helping his brother and he watched somebody jump out

671
00:32:24,160 --> 00:32:27,959
Speaker 5: of a window. And he lived to leave ninety one

672
00:32:28,000 --> 00:32:32,360
Speaker 5: years old. And he never bought a share of stock

673
00:32:32,920 --> 00:32:35,760
Speaker 5: in his entire life. Bolts and bonds, never stock. And

674
00:32:35,800 --> 00:32:38,720
Speaker 5: he would always say, andrew this whole stock market thing,

675
00:32:39,760 --> 00:32:40,120
Speaker 5: not for.

676
00:32:40,160 --> 00:32:41,080
Speaker 3: Us, too risky.

677
00:32:41,440 --> 00:32:43,680
Speaker 5: And so I when I say shattering the nation, I

678
00:32:43,680 --> 00:32:46,360
Speaker 5: mean I think it did to some degree come close

679
00:32:46,400 --> 00:32:48,720
Speaker 5: to shattering the psyche of a nation.

680
00:32:49,160 --> 00:32:51,920
Speaker 4: Did it come close to a civil war? No, But

681
00:32:52,240 --> 00:32:54,800
Speaker 4: clearly the idea.

682
00:32:54,640 --> 00:32:57,640
Speaker 5: Of unemployment being twenty five percent in America, that there

683
00:32:57,640 --> 00:33:01,920
Speaker 5: were shanty towns otherwise known as Whoville's literally in Central Park.

684
00:33:02,080 --> 00:33:05,000
Speaker 5: There's a couple of blocks from here, and then you know,

685
00:33:05,080 --> 00:33:08,120
Speaker 5: worse in so many other places. I think for a

686
00:33:08,200 --> 00:33:10,320
Speaker 5: generation of people, it felt like a shattered nation.

687
00:33:10,560 --> 00:33:13,680
Speaker 3: Yeah, you don't really go beyond the nineteen thirties in

688
00:33:13,720 --> 00:33:15,920
Speaker 3: the book, but it does feel like it took a

689
00:33:16,000 --> 00:33:18,880
Speaker 3: very long time to rebuild I guess trust in the

690
00:33:18,920 --> 00:33:22,120
Speaker 3: stock market, and we didn't really see retail like dive

691
00:33:22,200 --> 00:33:25,600
Speaker 3: in a lot until I guess the nineteen sixties, sixties.

692
00:33:25,720 --> 00:33:26,520
Speaker 4: Yeah, I think that's right.

693
00:33:26,520 --> 00:33:28,520
Speaker 5: I think that gets a little bit to the sort

694
00:33:28,520 --> 00:33:29,800
Speaker 5: of generational divide.

695
00:33:30,840 --> 00:33:32,680
Speaker 4: Look, the other piece of this is the book.

696
00:33:32,520 --> 00:33:35,080
Speaker 5: Doesn't go into World War Two and all the things

697
00:33:35,080 --> 00:33:37,920
Speaker 5: that happened after that. But that's actually I think coming

698
00:33:37,960 --> 00:33:40,560
Speaker 5: out of World War two is what ultimately led to

699
00:33:40,800 --> 00:33:44,000
Speaker 5: sort of the boom again to the extent we had

700
00:33:44,040 --> 00:33:47,360
Speaker 5: one in the US, and obviously the market's boom and

701
00:33:47,560 --> 00:33:49,280
Speaker 5: the reason why people I think started to get back

702
00:33:49,280 --> 00:33:50,840
Speaker 5: in the market was because the marke kept going up

703
00:33:51,080 --> 00:33:53,400
Speaker 5: and people started to look at the market like they

704
00:33:53,440 --> 00:33:55,320
Speaker 5: always do and when they think that the train is

705
00:33:55,400 --> 00:33:57,719
Speaker 5: leaving the station and they're not on the train. They

706
00:33:57,760 --> 00:33:59,200
Speaker 5: think I got to get on the train.

707
00:34:00,400 --> 00:34:02,800
Speaker 2: Back to something you said before, It's interesting that these

708
00:34:02,840 --> 00:34:06,440
Speaker 2: CEOs don't really speak their mind. When the whole thing

709
00:34:06,480 --> 00:34:09,880
Speaker 2: in January was like finally free speech. We could talk again,

710
00:34:09,960 --> 00:34:12,239
Speaker 2: we could say all the things that we've been hiding.

711
00:34:12,320 --> 00:34:13,600
Speaker 2: It's kind of messed up, isn't it.

712
00:34:14,600 --> 00:34:18,600
Speaker 5: Look you think that there should be real free speech

713
00:34:18,680 --> 00:34:20,680
Speaker 5: taking place and the people could raise their hand.

714
00:34:20,560 --> 00:34:22,280
Speaker 2: The liberal attitude towards speech.

715
00:34:22,320 --> 00:34:25,400
Speaker 5: But I think right now the view is what's the

716
00:34:25,440 --> 00:34:27,440
Speaker 5: trade off. I think there are people who look at

717
00:34:27,440 --> 00:34:29,239
Speaker 5: certain things happening in Washington and say, I don't like

718
00:34:29,280 --> 00:34:31,960
Speaker 5: what's happening. If I raise my hand now, if I

719
00:34:32,000 --> 00:34:34,960
Speaker 5: raise my hand today, what is the upside for raising

720
00:34:35,000 --> 00:34:37,759
Speaker 5: my hand and what is the downside for raising my hand?

721
00:34:38,080 --> 00:34:41,120
Speaker 5: I think they look and say, there's very little upside actually,

722
00:34:41,320 --> 00:34:44,920
Speaker 5: because the chance of real change in this moment right

723
00:34:44,920 --> 00:34:47,600
Speaker 5: now is unlikely. Maybe when we get to an election

724
00:34:47,719 --> 00:34:50,080
Speaker 5: or midterms or other things I don't know, and the

725
00:34:50,200 --> 00:34:53,680
Speaker 5: chance of it on the downside is high. I mean,

726
00:34:53,719 --> 00:34:56,560
Speaker 5: I think that between what we've seen the administration, do

727
00:34:56,600 --> 00:35:03,640
Speaker 5: the law firms to universities, paramount CBS story taking stakes

728
00:35:03,680 --> 00:35:06,080
Speaker 5: in Intel and other things. I mean, I think there's

729
00:35:06,160 --> 00:35:09,640
Speaker 5: real implications if you're a business leader today about how

730
00:35:09,680 --> 00:35:13,600
Speaker 5: you approach your job. Every business leader is almost have

731
00:35:13,640 --> 00:35:14,719
Speaker 5: to become a politician.

732
00:35:15,800 --> 00:35:19,760
Speaker 3: All right, this is a very journalistic, classic cliche question.

733
00:35:20,080 --> 00:35:22,160
Speaker 3: I feel kind of bad, but you're another journalist, so

734
00:35:22,360 --> 00:35:25,680
Speaker 3: you know, don't judge me. If you could, I guess,

735
00:35:25,760 --> 00:35:28,520
Speaker 3: take away one lesson from the nineteen twenty nine crash

736
00:35:28,719 --> 00:35:35,040
Speaker 3: and really emphasize it to politicians, policymakers, regulators, business people, whoever,

737
00:35:35,320 --> 00:35:35,920
Speaker 3: what would it be.

738
00:35:36,680 --> 00:35:41,759
Speaker 5: Every financial crisis is a function of one thing, is

739
00:35:41,960 --> 00:35:46,080
Speaker 5: leverage in the system. Too much leverage. You actually can

740
00:35:46,160 --> 00:35:49,960
Speaker 5: have speculators and all the bad actors you want doing

741
00:35:50,040 --> 00:35:53,160
Speaker 5: all the bad things you can imagine on stage, but

742
00:35:53,280 --> 00:35:56,880
Speaker 5: it's the leverage that tips it over. And as a result,

743
00:35:57,400 --> 00:36:00,640
Speaker 5: you need to have guard rails to prevent that because

744
00:36:00,680 --> 00:36:05,719
Speaker 5: the human condition is to want more, right, That's what

745
00:36:05,920 --> 00:36:09,440
Speaker 5: the investor class it's I hate to say, the idea

746
00:36:09,480 --> 00:36:12,440
Speaker 5: of self regulation is very very difficult. People do not

747
00:36:12,480 --> 00:36:15,200
Speaker 5: regulate themselves. They just don't, and so we just need

748
00:36:15,280 --> 00:36:18,080
Speaker 5: to be super careful, especially when there are all these

749
00:36:18,120 --> 00:36:20,160
Speaker 5: kind of new products being developed and other things. We

750
00:36:20,200 --> 00:36:24,080
Speaker 5: don't know where the leverage is. That to me would

751
00:36:24,120 --> 00:36:27,719
Speaker 5: be the single biggest thing. And my fear is we're

752
00:36:27,719 --> 00:36:30,960
Speaker 5: living in a moment right now actually where some of

753
00:36:31,000 --> 00:36:33,720
Speaker 5: those guardrails are almost purposely being taken away.

754
00:36:34,040 --> 00:36:36,600
Speaker 2: Well, we have four years between it for until the

755
00:36:36,840 --> 00:36:39,840
Speaker 2: one hundred year anniversary of the nineteen twenty nine crash.

756
00:36:40,160 --> 00:36:43,480
Speaker 2: Andrew Osorkin so thrilled to finally have you on the podcast.

757
00:36:43,520 --> 00:36:45,399
Speaker 2: The book is a great opportourney. It's really great.

758
00:36:45,400 --> 00:36:46,040
Speaker 4: I really appreciate.

759
00:36:46,040 --> 00:36:48,000
Speaker 2: It's really cool that you did this. Everyone should be

760
00:36:48,080 --> 00:36:50,240
Speaker 2: very impressed and everyone should check it out. It's great history.

761
00:36:50,600 --> 00:36:52,600
Speaker 2: And I hope it becomes a TV show.

762
00:36:52,960 --> 00:36:53,520
Speaker 4: Thank you. I hope.

763
00:36:53,560 --> 00:36:56,040
Speaker 5: I hope I can come back here in twenty twenty

764
00:36:56,120 --> 00:36:56,680
Speaker 5: nine if you have.

765
00:36:56,800 --> 00:37:09,000
Speaker 2: Four for sure, and then twenty third. Yeah, all right,

766
00:36:59,640 --> 00:37:14,680
Speaker 2: that Tracy.

767
00:37:14,719 --> 00:37:15,479
Speaker 4: That was a lot of fun.

768
00:37:15,880 --> 00:37:18,040
Speaker 2: I love bubble history. We used to do tons of

769
00:37:18,040 --> 00:37:20,520
Speaker 2: more episodes on They're always really fun.

770
00:37:20,640 --> 00:37:23,359
Speaker 3: Well, you know the Florida Land bubble gets mentioned.

771
00:37:23,600 --> 00:37:26,000
Speaker 2: Yeah, we did so a bunch of episodes on that.

772
00:37:26,280 --> 00:37:29,560
Speaker 2: And this is really cool. I love all the pop

773
00:37:29,600 --> 00:37:32,200
Speaker 2: culture elements, the Winston Churchill, the Groageo marks.

774
00:37:32,200 --> 00:37:33,040
Speaker 3: It's just astrology.

775
00:37:33,040 --> 00:37:36,480
Speaker 2: It's an incredibly rich story. It's incredibly rich piece of history.

776
00:37:36,520 --> 00:37:39,000
Speaker 3: Yeah, and it is funny. You can't avoid thinking about

777
00:37:39,000 --> 00:37:41,480
Speaker 3: the parallels. You really can't. When am I getting my

778
00:37:41,600 --> 00:37:44,440
Speaker 3: Japanese Exotic Rabbit bubble episode?

779
00:37:44,480 --> 00:37:47,239
Speaker 2: Wait anytime? Was that a bubble? I didn't know about

780
00:37:47,239 --> 00:37:47,960
Speaker 2: that apparently?

781
00:37:48,320 --> 00:37:50,560
Speaker 3: And sheep, I want to do New England sheep too.

782
00:37:50,600 --> 00:37:52,200
Speaker 3: I want to do all the animal bubbles.

783
00:37:52,480 --> 00:37:54,600
Speaker 2: Let's do it. Let's do them all. Here's the bat

784
00:37:54,640 --> 00:37:57,319
Speaker 2: the guano bubble. We've never done an episode on that.

785
00:37:57,920 --> 00:38:00,480
Speaker 2: But the one other thing too, is that think like

786
00:38:00,719 --> 00:38:02,560
Speaker 2: you know, two thousand and seven, two thousand and eight,

787
00:38:02,560 --> 00:38:05,280
Speaker 2: the Great Financial Crisis, that was like a debt bubble,

788
00:38:05,360 --> 00:38:07,480
Speaker 2: right There were a bunch of assets that were expected

789
00:38:07,520 --> 00:38:09,279
Speaker 2: to pay back at a dollar on the dollar, and

790
00:38:09,360 --> 00:38:11,640
Speaker 2: they like paid back at ninety cent and then people

791
00:38:11,640 --> 00:38:12,520
Speaker 2: panicked into his a bank.

792
00:38:12,600 --> 00:38:14,440
Speaker 3: There's still a lot of credit tied to it.

793
00:38:14,520 --> 00:38:16,440
Speaker 2: There was a lot of There was definitely the leverage.

794
00:38:16,480 --> 00:38:18,480
Speaker 3: The debt was being used as collateral.

795
00:38:18,040 --> 00:38:19,640
Speaker 2: For the debt was being used as a collateral. But

796
00:38:19,719 --> 00:38:22,239
Speaker 2: it was you know, right now, we don't It just

797
00:38:22,239 --> 00:38:24,239
Speaker 2: feels like it's a stock story, so I can say

798
00:38:24,520 --> 00:38:27,520
Speaker 2: things everyone wants access to the right tail, yeah, whatever,

799
00:38:27,560 --> 00:38:30,839
Speaker 2: and everyone wants the big score, et cetera. And that's

800
00:38:30,840 --> 00:38:33,760
Speaker 2: what sort of nineteen twenty nine reminds me of this idea,

801
00:38:33,880 --> 00:38:36,200
Speaker 2: like different than a sort of like housing bubble, just

802
00:38:36,239 --> 00:38:40,120
Speaker 2: this idea like everyone wants those right tail outcomes, including

803
00:38:40,160 --> 00:38:41,640
Speaker 2: Winston Churchill and Groad show mark.

804
00:38:41,719 --> 00:38:44,240
Speaker 3: Well, you know the chart that the Doomers always tweet

805
00:38:44,280 --> 00:38:47,920
Speaker 3: is the margin debt chart, right, And you know, I

806
00:38:47,920 --> 00:38:50,319
Speaker 3: have doubts about that because the margin debt chart goes

807
00:38:50,400 --> 00:38:53,120
Speaker 3: up when stocks go up, basically, but it is at

808
00:38:53,160 --> 00:38:53,680
Speaker 3: record high.

809
00:38:53,840 --> 00:38:56,040
Speaker 2: So anyway, people should definitely check out this book.

810
00:38:56,080 --> 00:38:57,120
Speaker 3: All right, shall we leave it there?

811
00:38:57,200 --> 00:38:57,839
Speaker 4: Let's leave it there.

812
00:38:58,040 --> 00:38:59,919
Speaker 3: This has been another episode of the All Thoughts Pod.

813
00:39:00,480 --> 00:39:03,320
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway.

814
00:39:03,400 --> 00:39:06,120
Speaker 2: And I'm Jill Wisenthal. You can follow me at the Stalwart.

815
00:39:06,320 --> 00:39:09,600
Speaker 2: Follow our producers Carmen Rodriguez at Kerman armand dash O

816
00:39:09,640 --> 00:39:12,880
Speaker 2: Bennett at Dashbod and Kale Brooks at Kalebrooks. For more

817
00:39:12,880 --> 00:39:15,480
Speaker 2: odd Lots content, go to Bloomberg dot com Flash Odd

818
00:39:15,520 --> 00:39:18,400
Speaker 2: Lots with a daily newsletter. And all of our episodes,

819
00:39:18,520 --> 00:39:20,399
Speaker 2: and you can shut about all of these topics twenty

820
00:39:20,440 --> 00:39:23,840
Speaker 2: four to seven in our discord discord dot gg slash

821
00:39:23,880 --> 00:39:24,879
Speaker 2: od Lots and.

822
00:39:24,920 --> 00:39:27,160
Speaker 3: If you enjoy odd Lots, if you like it when

823
00:39:27,200 --> 00:39:30,080
Speaker 3: we talk about the crash of the nineteen twenties, then

824
00:39:30,120 --> 00:39:33,440
Speaker 3: please leave us a positive review on your favorite podcast platform.

825
00:39:33,640 --> 00:39:36,399
Speaker 3: And remember, if you are a Bloomberg subscriber, you can

826
00:39:36,400 --> 00:39:39,560
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827
00:39:39,560 --> 00:39:41,520
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828
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Speaker 3: Apple Podcasts and follow the instructions there. Thanks for listening

829
00:40:01,440 --> 00:40:01,480
Speaker 3: It