Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hey, there are odd lots listeners. This is Tracy Alloway
Speaker 2: and Joe.
Speaker 3: Why isn't thal?
Speaker 4: We are very.
Speaker 2: Pleased to bring you a live recording of the podcast
Speaker 2: that was part of Bloomberg invest that's our flagship investment
Speaker 2: conference over here at Bloomberg. And we truly had the
Speaker 2: perfect guest, someone I've wanted to interview for a very
Speaker 2: long time, never got the chance. It is, of course,
Speaker 2: the former CEO of Coleman Sachs Lloyd Blankfine. Take a listen, Joe,
Speaker 2: I have a confession to make.
Speaker 5: Yeah, go on.
Speaker 2: This is probably the most nervous I've ever been for
Speaker 2: an adlots episode.
Speaker 5: Are you for real? Yeah?
Speaker 2: And I'll tell you why, and actually the reason why
Speaker 2: you'll know because you want to do the first time
Speaker 2: Joe and I ever met Lloyd blank Fine in person
Speaker 2: was at a sort of media round table, and for
Speaker 2: some reason I felt it incumbent upon myself to tell
Speaker 2: a joke.
Speaker 5: We were late too, Oh, I was you came in late?
Speaker 2: All right? I forgot that part. I like that I
Speaker 2: told a joke to try to, you know, make it up.
Speaker 2: I guess probably the joke was at Goldman's expense, at
Speaker 2: which point Lloyd leaned forward on the table and he said,
Speaker 2: let me tell you how I would have made that
Speaker 2: joke funny. And the worst part was he then made
Speaker 2: a very very good joke that was a lot funnier
Speaker 2: than what I had just said.
Speaker 4: I think I said, you're supposed to you should put
Speaker 4: the punchline at the end, not at the beginning.
Speaker 3: That's right, We can we actually talk about what the
Speaker 3: joke was, the context of the joke, because I remember
Speaker 3: it well.
Speaker 2: Go on.
Speaker 3: So the whole reason that the media roundtable happened was
Speaker 3: that apparently Lloyd was supposed to be in China for
Speaker 3: some reason, and something happened like someone from the UK
Speaker 3: was there and Lloyd's schedule got changed, and so they
Speaker 3: at the last second they're like, oh, maybe some reporters
Speaker 3: will bring in and that The joke that Tracy made
Speaker 3: was something about having to be like, oh, were you
Speaker 3: going to go there to recruit princelings for Goldman's Sex,
Speaker 3: which at the time was you know, one of those scandals.
Speaker 2: I swear it was better than that, but that was the.
Speaker 5: Theme of the joke. It was a Goldman's expense.
Speaker 2: All right, So we all learned our lesson, which is
Speaker 2: don't try to be funnier than Lloyd because he'll beat
Speaker 2: you at it every time. But Lloyd, congratulations on the book.
Speaker 4: Well, thank you.
Speaker 2: Very exciting to be speaking with you. One thing I
Speaker 2: learned from the book is that you're spending your time
Speaker 2: trading now. And when I read that, I sort of
Speaker 2: had a vision of you on your phone on Robin
Speaker 2: Hood trading like zero day options or something like that.
Speaker 2: What are you actually trading and where.
Speaker 4: Well, I'm sort of committed to Goldman, I would be
Speaker 4: on Robin History now. To me, that's one of the
Speaker 4: occupational hazards of my prior life is that I watch
Speaker 4: markets all the time. I watch markets at night while
Speaker 4: I'm asleep, and so I know the price of everything
Speaker 4: all the time, and I trade. But it's not like
Speaker 4: when you say I'm spending you spend your time trading, No,
Speaker 4: it's just background noise. I'm having a conversation in my
Speaker 4: life with people like you know, hanging around with Sometimes
Speaker 4: in business it is not continued to be rude that
Speaker 4: if you're talking to somebody, you're not looking at them
Speaker 4: but looking at a screen or a phone or something
Speaker 4: like that. That's that's kind of okay. So it's like
Speaker 4: work Joe, so trade doing that. When somebody says what
Speaker 4: percentage of your time? Your time, it's like listening to music.
Speaker 4: You can listen to music while you're doing something else,
Speaker 4: so it adds up to more than one hundred percent.
Speaker 3: What are you I'm not we're not here for stock recommendations,
Speaker 3: but like what's interesting in markets and such that you
Speaker 3: feel compelled to click buttons and try to anticipate move Well.
Speaker 4: I was always kind of a mac I mean, came
Speaker 4: up through what we call them, you know, the macro markets,
Speaker 4: large things, interest rates, you know, government policy, fiscal you know,
Speaker 4: the sort of stuff that kind of moves all assets together.
Speaker 4: Although there's all these differences. So that's my background. But
Speaker 4: the themes, I mean, everybody now is in the is
Speaker 4: in tech because if you weren't in tech, you'd be
Speaker 4: bankrupt because you'd be wrong for all this time. So
Speaker 4: everybody is given how the markets have moved sort of
Speaker 4: consistently for a very long time. I could tell you
Speaker 4: what everybody is kind of in, and of course I
Speaker 4: could tell you who's getting hurt at any given part
Speaker 4: when it gets upset for a day. But I'm in
Speaker 4: probably things that wouldn't surprise you. But maybe the biggest
Speaker 4: surprise is that I'm all in, you know, so like
Speaker 4: I'm always one hundred percent in equities, now risk assets,
Speaker 4: that's what you say, risk risky assets.
Speaker 2: Well, so after you retired from Goldman, some people were
Speaker 2: surprised that you didn't choose to go into politics, like
Speaker 2: some of your peers. Yeah, well, explain that, like why
Speaker 2: did you you took a proper break when you left Goldman.
Speaker 4: Yeah, well, let me tell you. If somebody gave me
Speaker 4: something overwhelmingly interesting and fun, I might have done it.
Speaker 4: Five of my last six predecessors either went into the cabinet,
Speaker 4: except for John Corzon, who became Senate of New Jersey.
Speaker 4: But you know, you know, Bob Rubin and Hang Pauls
Speaker 4: and Treasury secretaries and whatnot. I came out in the
Speaker 4: I stopped in twenty eight and end of two thousand,
Speaker 4: so the second half of Trump one, the beginning of
Speaker 4: Trump one, you know, the economic team was Gary Khane
Speaker 4: and Steven Nutch and all ex Goldman. So I think
Speaker 4: we had had enough of that, and I certainly didn't
Speaker 4: want I didn't want to like add myself to the
Speaker 4: list at that point, and so kind of drifted on.
Speaker 4: Then I drifted through COVID, and I say, you know,
Speaker 4: I kind of like this, you know, not sending an alarm
Speaker 4: clock in the morning and Saturday afternoon, having lunch with people,
Speaker 4: and not having to go to the airport on a
Speaker 4: Saturday afternoon so I could get to Beijing first thing
Speaker 4: Monday morning. And so it's easy to get used to sloth.
Speaker 3: So here's the thing I get not taking some big
Speaker 3: job after retirement, Like I totally get that. I get
Speaker 3: wanting to trade and that sounds like stimulating and intellectually,
Speaker 3: you know, interesting and fun and so forth.
Speaker 5: Here's what I don't get. Why don't you tweet more?
Speaker 3: And the reason I asked that is like, because like
Speaker 3: I'm addicted to posting, and a lot of people in
Speaker 3: your shoes or at your level, you fuel this impulse
Speaker 3: to like always weigh in on everything, and.
Speaker 5: Twitter is a graduate to I know, but number that much.
Speaker 5: And what I want to know is like.
Speaker 4: No, I was I was fighting with people. I was
Speaker 4: fighting with people that had subpoena power.
Speaker 3: Okay, so how resist the temptation to keep doing it
Speaker 3: because I would like to know how to post less.
Speaker 3: So how do you resist the urge to chime in
Speaker 3: on everything.
Speaker 4: I was in the risk management business, and so the
Speaker 4: risk reward a certain things. So, for example, retired. When
Speaker 4: things are going badly, you can't leave my job. And
Speaker 4: by the way, we had the Crisis of the century
Speaker 4: every four years, and most of the time that accused
Speaker 4: us of and probably you accused us of causing it falsely.
Speaker 2: Of course I did write a few those.
Speaker 4: Yes, I'm sure I pretend to have forgotten that. But
Speaker 4: when things are going well, you know, when things going badly,
Speaker 4: you can't leave. When things are going well, you don't
Speaker 4: want to leave, which is why in my line of work,
Speaker 4: everybody leaves in distress. You get fire, something comes over,
Speaker 4: the world blows up, you don't do well, you have
Speaker 4: you lose. Something happened, and I didn't do that. I
Speaker 4: left on my own steam, and I quit tweeting. I
Speaker 4: still tweet very occasionally, but I mostly quit tweeting before
Speaker 4: I got canceled, which is very unreal impressive because most
Speaker 4: people quit after they most people most people get quit,
Speaker 4: they don't quit on their own.
Speaker 3: And you chalk that up to your natural risk management
Speaker 3: knowledge and intuitions. You're like, you know what, I'm just
Speaker 3: gonna I'm not gonna do it until the end when
Speaker 3: you're not going to.
Speaker 4: Go In general, chalk it up to my normal anxiety
Speaker 4: and my not wanting to, you know, get killed. So
Speaker 4: cowardice you might call, you know, just sensible. Well, it's sensibile, sense, sensibility,
Speaker 4: but really most of that stuff. And you know, because
Speaker 4: I was doing things on the line, I would fight
Speaker 4: with you know, Lizabeth Warren, and you know, largely because
Speaker 4: they would say something. Mostly I was responding, and I
Speaker 4: kind of liked it. And the problem is you get
Speaker 4: a good reaction something, you know, good reaction, and then
Speaker 4: you start to feel clever, and when you start to
Speaker 4: feel clever, that's when you're going to get killed because
Speaker 4: then you think, gee, this is irresistible. And then somebody
Speaker 4: might say, well, they're not going to like that. And
Speaker 4: I said, how can I resist? It's so clever? And
Speaker 4: so guess what, I found it resistible? So I stopped impresent.
Speaker 2: Yeah, it just takes one bad tweet. So when I
Speaker 2: think about your career, and you know, I've read the
Speaker 2: whole book, so I know your career trajectory fairly well.
Speaker 2: At this point. I kind of think of it as
Speaker 2: synonymous with globalization, and you know, you wrote the sort
Speaker 2: of wave of international expansion, and then you retired in
Speaker 2: twenty eighteen, and it turned out twenty eighteen twenty twenty
Speaker 2: was sort of the end of that globalization era.
Speaker 4: Yeah, the world is a little less flat.
Speaker 2: Yeah, when you look back on that time, do you
Speaker 2: think that was a blip? Was that an unusual circumstance
Speaker 2: that's never going to be repeated?
Speaker 4: When I start, you know, when sentiment changes, it changes
Speaker 4: your memory of what you used to think. It's kind
Speaker 4: of a weird thing. So nobody can remember being friends
Speaker 4: with Russia now, but we were when I started. Did
Speaker 4: you couldn't think of going to Russia? I remember I
Speaker 4: once my early trips. I was in the commodities business. Also,
Speaker 4: I started in the commodities business. I used to go
Speaker 4: to Russia in the early eighties literally like nineteen eighty
Speaker 4: two and nineteen eighty three, middle of the Cold War.
Speaker 4: And I remember when the plane would take off and
Speaker 4: you wouldn't go directly go to switch you know, going
Speaker 4: the end, people start applauding the plane lifted off. You
Speaker 4: couldn't imagine Russia being normal, like a place to do business.
Speaker 4: Then in the go go years after the fall of
Speaker 4: the Iron Curtain, you'd go there and it was like
Speaker 4: the what it was capitalism on steroids, and you thought
Speaker 4: that that was going to endure, and now you know
Speaker 4: it reversed again. Same thing with China, when you know,
Speaker 4: we invested a lot of time. I personally invested a
Speaker 4: lot of time and effort, and in a your brother,
Speaker 4: we still have a big business in China, but it's
Speaker 4: you know, as imagine I've strained now it's very hard
Speaker 4: to do business. We had a lot of joint ventures
Speaker 4: that can't be done because it's a Chinese you know,
Speaker 4: too much of a Chinese association for it. But when
Speaker 4: I started, you couldn't have gone. Then for a long
Speaker 4: time you thought we were growing into each other, and
Speaker 4: then you know, now we hit a speed up. The
Speaker 4: point is there are cycles to everything. It's not a
Speaker 4: question of something being blipped. Everything is a blip and
Speaker 4: everything gets a little bit undone. I think I would
Speaker 4: have said, and I still believe. I think the tendency
Speaker 4: is for things to improve, to get better. You know
Speaker 4: what happened what you know, globalization. It's not just the
Speaker 4: rivalries or the polarization of the East and the West.
Speaker 4: The global financial crisis contributed to that because what happened was,
Speaker 4: you know, there was the central banks of the world
Speaker 4: and the governments of the world were coordinating their policies.
Speaker 4: And then when it hit the fan. In a digital
Speaker 4: world where nothing really moves except electrons and digital notations,
Speaker 4: it suddenly became important to each government where an institution's
Speaker 4: assets were. If the assets were in the United The
Speaker 4: US Central Bank, the FED was lending money, for example,
Speaker 4: to the US affiliate of Deutsche Bank, and they were
Speaker 4: lending to Deutsche Bank multiples of the assets that Deutsche
Speaker 4: Bank had subject to the US because most of their
Speaker 4: assets were Germany. All of a sudden, people realize that,
Speaker 4: and it became very nineteenth century. It became where are
Speaker 4: the assets like physically, as if they were really physical
Speaker 4: assets as opposed to but assets have a location. And
Speaker 4: they discovered that similarly, I mean you can go case
Speaker 4: by data point by data point COVID. It made a
Speaker 4: real difference who where they were manufacturing the vaccines for
Speaker 4: who got them first or the PPE and all this
Speaker 4: other stuff, and so now of course that's been you know,
Speaker 4: emphasized now because now it's you know, America first, and
Speaker 4: I'm sure, you know, I don't speak German, but i'm
Speaker 4: sure in Germany it's Germany first, and it's like that.
Speaker 4: But that also will evolve, and that's that cycle will
Speaker 4: go again, because you know, does the world It turns
Speaker 4: out when when we started to globalize, you say, does
Speaker 4: Europe need fourteen battery makers? Shouldn't they just have three
Speaker 4: for the whole thing? And then it became very important
Speaker 4: that you had a battery make if it's strategic in
Speaker 4: your own country, and supply chains another things that make
Speaker 4: people less global.
Speaker 3: When you think about that time, the FED opening up
Speaker 3: swap lines with central banks all around the world, banks
Speaker 3: getting support even if they're not necessarily primarily domiciled in
Speaker 3: the US, do you think that that would even be
Speaker 3: possible today in the current media environment because it was
Speaker 3: controversial then what was going on.
Speaker 4: First of all, you have to do what you have
Speaker 4: to do, So would you think it would be possible
Speaker 4: to an America first presidency where we're not going to
Speaker 4: go into wars? Is this possible? But of course, you know,
Speaker 4: he felt you know, obviously he felt there was some
Speaker 4: compulsion to do it. People disagree, but that's certainly how
Speaker 4: he's representing it. So you do what you have to do.
Speaker 4: If we had a cry is like that, you would
Speaker 4: have to sort out the banking system. Now you can
Speaker 4: want to bring them up and trial and kill them.
Speaker 4: You do whatever you want to do it. But at
Speaker 4: the end of the day, governments don't lend money to people,
Speaker 4: and central banks don't lend money to people. The transmission
Speaker 4: for economic policy and for monetary policy and getting money
Speaker 4: out into the public is the banking system. And if
Speaker 4: the banks are distressed, if you gave them money, they
Speaker 4: husband that money to increase their reserves so they could
Speaker 4: be solvent. And in fact they have to do that,
Speaker 4: the regulation requires that they do that. And so it's
Speaker 4: very very hard to get money and resources and get
Speaker 4: people going and provide that stimulus to the general public
Speaker 4: with a distressed banking system, which is why the big
Speaker 4: recession was a big recession because it was very hard
Speaker 4: to get over. Today, if we had bad employment, if
Speaker 4: growth went down, and we weren't particular worried about inflation,
Speaker 4: it'd be no problem to stimulate the economy, you take
Speaker 4: rates down, fiscal spending, the banks are in good shape.
Speaker 4: If the banks are in bad shape, that's very hard
Speaker 4: to do.
Speaker 2: I mean, since we're talking sort of hypothetical crisis scenarios,
Speaker 2: one of the things we sometimes hear from people is
Speaker 2: because the US government is very polarized at the moment,
Speaker 2: maybe some people would say feels a little bit disorganized
Speaker 2: at times. If we had a financial crisis, the response
Speaker 2: would be a lot less direct or a lot less
Speaker 2: swift than what we saw in two thousand and eight
Speaker 2: when we had ex Golmannites like Hank Paulson at the
Speaker 2: Helm or Guythner for that matter. What's your sense of
Speaker 2: how the current administration would react to something like that.
Speaker 4: I've said this, and you know, you don't know, nobody
Speaker 4: knows anything, But my guess is they would be flee
Speaker 4: to footing. They would do because you have to do
Speaker 4: what you have to do. They would hate, Look, they
Speaker 4: would hate if that had to happen hypothetically, they would
Speaker 4: hate it. They hated it in two thousand and eight,
Speaker 4: really hated it, really really fifteen more relies hated it.
Speaker 4: But we would look, you know, staring at not so
Speaker 4: much staring at the abyss like it would have gone.
Speaker 4: But my guess, and everyone's always asking it, I think
Speaker 4: there was like like a fifteen seventy fifteen to twenty
Speaker 4: percent chance that it could have really have gone off
Speaker 4: the rails and that we really would have had a
Speaker 4: crisis that would have taken a very long time, because
Speaker 4: what happens is in a kind of crisis where there's credit,
Speaker 4: a credit crisis, which is what it was, a credit crisis.
Speaker 4: We owe each other money. There's a daisy chain of money.
Speaker 4: You bought something from him, he bought it from me,
Speaker 4: and that goes around in a credit where you don't
Speaker 4: know the sovereignty of your counterpart. You're not going to
Speaker 4: pay me until I pay you, so you're waiting. But
Speaker 4: I can't pay him unless I get my money from you.
Speaker 4: So I'm stuck and he's stuck, and he's stuck and
Speaker 4: he's stuck. So the system is frozen. You need somebody
Speaker 4: with a big back sheet, and it's usually a government
Speaker 4: to say we will for this short term cover it,
Speaker 4: so all of you will get paid. Now go in.
Speaker 4: Generally you don't have to use the money. The money
Speaker 4: comes back because it's just insecurity that drives that, and
Speaker 4: I think the government would have to do that. They'd
Speaker 4: hate it, but would have to do that. And by
Speaker 4: the way, is that going to happen again? You know? Fortunately,
Speaker 4: you know it was a once in eighty year storm.
Speaker 4: But you know, I don't think I'm going to see
Speaker 4: the next one. But you know these things, You know,
Speaker 4: when you get through a crisis like that, everyone says,
Speaker 4: let's ensure we never have another crisis again. And you
Speaker 4: know how you can do that. You can turn yourself
Speaker 4: into a treasury bill. You can turn you and even
Speaker 4: a treasure bill has risk because you're taking a risk
Speaker 4: with the value that the value of the dollar doesn't
Speaker 4: get inflated away and retains its purchasing power. If you
Speaker 4: take zero out risk, you will have zero progress and
Speaker 4: zero growth. And so what happens is and again it's
Speaker 4: a cycle to things. You come out of that and
Speaker 4: you say never never, never never. You implement very very
Speaker 4: tough protocols and regulations and things, and over time you
Speaker 4: start to think, you know, it'll be a lot growth here,
Speaker 4: if there was more here's a good word, it'd be
Speaker 4: a lot growth here. It wouldn't be great if banks
Speaker 4: did mortgages again, it wouldn't it be great if you
Speaker 4: didn't have to put down thirty percent to get them
Speaker 4: mary and blah blah blah. And it relaxes that time,
Speaker 4: memories start to dim and it gets to a point
Speaker 4: and maybe it gets past the point where it should
Speaker 4: and the cycle resumes, And you say, how could that
Speaker 4: have happened again so soon? It's only been eighty.
Speaker 5: Years, so one area.
Speaker 3: And you've commented on this a little bit in your
Speaker 3: little media tour over the last several days weeks. But
Speaker 3: you know, we've had a lot of stress in private assets,
Speaker 3: private credit in particular, some of the big companies having
Speaker 3: issue all kinds of issues. It's one thing for it
Speaker 3: to be bad, and maybe it's one thing for people
Speaker 3: to lose money. Is there anything about the structure though,
Speaker 3: that could get systemic where it be come to something
Speaker 3: beyond just investors lost money because they may better?
Speaker 4: I think, you know, talking about credit, I think the
Speaker 4: general issue is ill liquid liquid stuff. It could be
Speaker 4: private equity and you know, like everything, like everything else
Speaker 4: that balloons into a crisis. Of course, I don't think
Speaker 4: it's going to be systemic. No one does. No one
Speaker 4: thought because if everyone thought it would be systemic. You know,
Speaker 4: you'd have fixed it or we would have done something
Speaker 4: about it before it got to that point. You're always surprised.
Speaker 4: Even the people who you think are in the inside
Speaker 4: who should know better, they're also surprised too. I don't know,
Speaker 4: you know, the private credit and other private assets. I
Speaker 4: think they're generally, of course, by by definition they don't
Speaker 4: trade publicly, so they're less liquid and probably maybe sometimes illiquid,
Speaker 4: and consequently very hard to price. So when you have
Speaker 4: your asset and you look at your account and you
Speaker 4: own this and you get a mark to market, is
Speaker 4: it reliable? Is it where you can sell it? There
Speaker 4: are a lot of private assets on people's balance yet
Speaker 4: that take private equity. We've just gone through a period
Speaker 4: of time where we've had record equity prices in a
Speaker 4: world that's a wash with liquidity, the best financing market,
Speaker 4: and they're still in an accumulation of assets on the balance
Speaker 4: sheet of companies that are in the business of selling
Speaker 4: the assets they invest in. Yet it hasn't happened, so
Speaker 4: maybe they're not marked for sale really to be done,
Speaker 4: So that could be an issue. In general, I'd say
Speaker 4: one of the things now there's nothing wrong with private credit,
Speaker 4: private asset, private equity, as long as the returns, the
Speaker 4: expected returns, compensate you for the ill liquidity, and the
Speaker 4: people you're communicating to understand the illiquidity and the consequence
Speaker 4: of the illiquity to them, that has to be made clear.
Speaker 4: I'm not always sure that it is, and certainly if
Speaker 4: it goes wrong, no one will remember having been told that,
Speaker 4: so I would say, and taking account of that, I
Speaker 4: would say, a particular private asset, whether it's credit or
Speaker 4: private equity, is no different in your hand, in an
Speaker 4: individual's hands, or an institution hand, but the consequence of
Speaker 4: it going badly is much worse if it's individual hands.
Speaker 4: Why is that because, I would say, the official sector
Speaker 4: can watch institutions, very high net worth individuals lose money
Speaker 4: and not be particularly perturbed about that. But when it
Speaker 4: goes to consumers and retails other names for which are
Speaker 4: citizens and taxpayers and voters the public, the official sector
Speaker 4: gets very perturbed. So one of the comments I made
Speaker 4: is without applying whether these are good, or whether the
Speaker 4: marks are correct, or whether the illiquidity premium you're getting
Speaker 4: is adequate or not, I just said, you know, be
Speaker 4: careful some of these firms. People wh run these firms
Speaker 4: have fabulous lives, do very well for a long time,
Speaker 4: have boats and everything, and great hat in multiple houses.
Speaker 4: Have some trepidation about extending your business from institutions into
Speaker 4: four to one k's people ets, people who are less
Speaker 4: than the highest net worth individuals, and by the way,
Speaker 4: adjacent insurance companies, which is sort of one order away
Speaker 4: from individuals, because insurance companies ensure real people and need
Speaker 4: to be solvent. So that's something that I'd say is
Speaker 4: happening to It's not just the nature of the assets
Speaker 4: but where some of these assets are being put now.
Speaker 2: So I take the point about retail investors and private credit,
Speaker 2: but just putting your old Goldman Sachs CEO hat on again.
Speaker 2: I mean, one of the things Goldman was famous for
Speaker 2: was it's very dynamic risk management at the time, and
Speaker 2: so I'm very curious walk us through in excruciating detail,
Speaker 2: how you, as CEO of Goldman Sachs, would be managing
Speaker 2: private credit risk at the moment on a day to
Speaker 2: day basis for something that you know might be marked
Speaker 2: to market quarter.
Speaker 4: Only risk that we had well balance, Yes.
Speaker 2: What style of risk managements.
Speaker 4: I mean in the financial price everyone's focused on mortgages.
Speaker 4: Some of the biggest risks that we had were just
Speaker 4: loan commitments to come. You know, we're we have a
Speaker 4: very big with the biggest mn A house, so we
Speaker 4: have very big mem and a franchise, which means that
Speaker 4: if you do an M and A deal, you commit
Speaker 4: to the financing. So we had a lot of financing
Speaker 4: commitments outstanding. That was sort of eye opening at the
Speaker 4: time because we had commitments to make loans, which, believe me,
Speaker 4: at the time, you know, when things are going crazy,
Speaker 4: it's the last thing you want to do is do then,
Speaker 4: So that we had to manage those risks. So you know,
Speaker 4: what do we do. We make sure in the lead
Speaker 4: up to the press. You know, once something is happening,
Speaker 4: you know, it's pretty late to start doing stuff when
Speaker 4: everybody's trying to get out of the same stuff. We
Speaker 4: sort of always knew it. We we had a you know,
Speaker 4: a real abiding respect for reality. So we would always
Speaker 4: try to mark stuff to market and very assigiously. We
Speaker 4: had a separate group. Half the firm would take risk
Speaker 4: and the half would market would do the marks, and
Speaker 4: sometimes the risk takers would disagree and say, oh, that
Speaker 4: mark is too concertive. I think this s assets worth more,
Speaker 4: and we'd say, fine, I'm sure you're right. Go sell
Speaker 4: something and prove that your mark is better than their market,
Speaker 4: that it's worth more. We would do that religious I mean,
Speaker 4: we were firm on that. And then when things started
Speaker 4: to get bad, when people couldn't sell things for where
Speaker 4: they thought it was, we started marking it lower. And
Speaker 4: when that started to happen, we didn't necessarily think we
Speaker 4: didn't have a view that was going to happen. We
Speaker 4: went into risk management mode. So it didn't matter whether
Speaker 4: it was bullish or bearish. Stuff is happening, and so
Speaker 4: we just put out the word stay close to home.
Speaker 4: So we have to take risk. People come to us
Speaker 4: to buy from them what they want to sell, to
Speaker 4: sell to them what they want to buy. We get
Speaker 4: caught in risk taking situations from our general activities for
Speaker 4: our clients. But whenever we were veering too much in
Speaker 4: one direction, getting too long and getting too short, we
Speaker 4: would stop until there was another side to it and
Speaker 4: we would source the other side. So, I mean, the
Speaker 4: key for us was not reacting crazily when it started
Speaker 4: to go badly. But what we did in the lead up.
Speaker 4: The other thing we did when we couldn't get other
Speaker 4: sides to things. We bought insurance in the market, famously
Speaker 4: from other banks for very little, because it was worth
Speaker 4: very low. We bought insurance on triple A companies that
Speaker 4: weren't turned out not to be triple A. We didn't
Speaker 4: do that because they thought that, aha, these really aren't
Speaker 4: triple A companies. Oh no, we thought they were triple
Speaker 4: A companies. But we just didn't want to have too
Speaker 4: much exposure to anything at that point. And the good
Speaker 4: thing about the fact that it doesn't, you know, it
Speaker 4: doesn't look like you need the insurance is that the
Speaker 4: people who sell you the insurance don't charge you very
Speaker 4: much because they think it's free money. And by the way,
Speaker 4: we thought we were wasting money and it turned out not.
Speaker 4: But that's just a discipline that you have to have
Speaker 4: all the time. You can't have that discipline when it
Speaker 4: looks like things are going bad. You have to have
Speaker 4: those things at that discipline when things are looking good.
Speaker 5: Right, That makes a lot of sense. New York City,
Speaker 5: how are you feeling?
Speaker 3: Is New York City the center of the finance world?
Speaker 3: Today the same way it was fifteen thirty years ago,
Speaker 3: and is that at risk.
Speaker 4: Look, New York City is still where people come. Young
Speaker 4: people come, especially to learn what to learn from their
Speaker 4: colleagues and to be it around and be surrounded by
Speaker 4: a good culture and a good place. And I think,
Speaker 4: you know, that's why I love the book, and I
Speaker 4: thought it was a brilliant book, but I thought it
Speaker 4: was wrong. The world is flat. You know, you can
Speaker 4: be stimulated by something that's not right. The fact of
Speaker 4: the matter is, you know, you could be hooked up
Speaker 4: and be living in Warsaw, which by the way, is
Speaker 4: a financial community, and then and there's a lot of
Speaker 4: tech people in Warsaw, but people who are smart and
Speaker 4: ambitious want to be around other people who smart.
Speaker 5: Did that change it all?
Speaker 4: I'd say there are more podes than there were before.
Speaker 4: So I think there's communities in obviously in San Francisco,
Speaker 4: which is a tech community. A sub tech community is Boston,
Speaker 4: which has biotech, and so there are other places that grow.
Speaker 4: But I still think the highest concentration is still. People
Speaker 4: are promoting Miami for that and there's a lot of
Speaker 4: you know, a lot of reasons for it, Like you
Speaker 4: get to keep more of your money because there's no
Speaker 4: state tax. Expensive place to live New York, by the way,
Speaker 4: very expensive place to die. I don't know why I'm
Speaker 4: thinking those dark thoughts now, but because we New York
Speaker 4: has a to state tax, and even California doesn't. But
Speaker 4: so for tax reasons and for reasons of sunshine, people
Speaker 4: going there. But it's not New York. It's still New York.
Speaker 3: You know, kind of s are you know on the
Speaker 3: Miami thing? I like Miami, But why aren't you there?
Speaker 5: Do you don't spend one hundred and eighty three days?
Speaker 4: I'm I'm still New York tax payer.
Speaker 5: Yeah, why stupid? O?
Speaker 4: No I do it. New York City is the greatest
Speaker 4: I have. You know, my wife, you know, we have
Speaker 4: kids and we have grandkids. I tell my wife from
Speaker 4: time to time, if you really loved your kids and
Speaker 4: your grandkids, you moved to Florida. And I just said, no,
Speaker 4: it's still but you know, we like being around a family.
Speaker 4: We have plenty of money, you know, and you know
Speaker 4: my wife, I don't know how things running your household,
Speaker 4: but you know I would say that she has full
Speaker 4: voting control.
Speaker 2: I'm not going to say anything I'm a holding back
Speaker 2: comment right now, So I just want to go back
Speaker 2: to risks for a second. So you know, in your
Speaker 2: book you talk a little bit about private credit, but
Speaker 2: the one risk you highlight as the sort of big
Speaker 2: one that worries you the most is some sort of
Speaker 2: technological risk.
Speaker 4: Like oh, I said, yeah, you know it has said
Speaker 4: the world is going to end in a whim, burnout,
Speaker 4: a bang. Yeah, you know, everybody's talking about Malevlande State agents,
Speaker 4: you know, taking it down every time we lost stuff,
Speaker 4: and we had some wonderful problems in technology. Well, every
Speaker 4: once in a while there was some bad behavior and
Speaker 4: somebody hid something for a while, but most of the
Speaker 4: time it was a fat finger. Like I remember one
Speaker 4: famous incident where somebody, Now why anybody would do this,
Speaker 4: but they were they were testing some software and in
Speaker 4: the software they were you know it.
Speaker 6: Just said they I remember this, like somehow they were
Speaker 6: selling somehow it got turned on and it sold all
Speaker 6: stocks that started with an L, M, N, O or
Speaker 6: P for a dollar.
Speaker 4: Now, if you're going to test something, why wouldn't you
Speaker 4: sell sell it for a million dollars? So nothing ever
Speaker 4: gets somebody had sell it for a dollar and that
Speaker 4: thing was working for about fifteen seconds and did about
Speaker 4: two billion dollars you know, billion dollars and a half
Speaker 4: dollars worth of transactions which you managed to get undone.
Speaker 4: Mostly Yes, you know, fat finger. What's a fat finger?
Speaker 4: That's when you hit the wrong key and somebody it
Speaker 4: was like stupid, somebody put in and do it. The
Speaker 4: problem with technology is you want to check things over
Speaker 4: and over again. But if you build in nine checks,
Speaker 4: nobody takes it seriously because I know eight other people
Speaker 4: are gonna check it. It doesn't even solve the problem
Speaker 4: to build in more layers of checking, because it's mind
Speaker 4: I mean to check something where there's not a problem
Speaker 4: except once every two years. Who's gonna Who's gonna sleep
Speaker 4: through that? No, the world, I've said, the world is
Speaker 4: getting dangerous a way. When I started out in a
Speaker 4: trading room, every was said out loud. Somebody would say bye,
Speaker 4: and you know people, and it was all noy. Today,
Speaker 4: you go into a trading room and you're communicating digitally
Speaker 4: with the person sitting next to you. In the old days,
Speaker 4: you'd shout across the room and if somebody said something wrong,
Speaker 4: a buy instead of a cell or the wrong number
Speaker 4: or the wrong price, the whole room would stop and
Speaker 4: everybody would look at that person. You would hear it.
Speaker 4: Now nobody hears anything, and if they did, they wouldn't
Speaker 4: know because no one could into it anything because a
Speaker 4: lot of algorithms and a lot of technology trading. So
Speaker 4: I would say with technology, technology is leverage, and leverage
Speaker 4: is good when it's going the right way, and leverage
Speaker 4: is bad when it's going the wrong way. And by
Speaker 4: the way, that's in life. And you know, if you
Speaker 4: had an you know prior to the age we're in
Speaker 4: today where you know where the nuclear age where proliferating
Speaker 4: and more atomic power and things like that, even for
Speaker 4: good uses. What could an industrial accident be? They think
Speaker 4: the biggest industrial accident was Bapal Union car buy eight
Speaker 4: or nine thousand, very tragic, horrible situation. Liability for Union
Speaker 4: Carbide destroyed the company. But I think eight or nine
Speaker 4: thousand people died in Fukushima, the Japanese when they had
Speaker 4: the tsunami and effected. If the wind had been going
Speaker 4: in a different direction, you would have had millions of
Speaker 4: people die. That's technology and progress for you. So not
Speaker 4: only is their leverage, the ability to into it and
Speaker 4: see what the problem is is less. So I just
Speaker 4: postulated that, you know, we have all these safeguards, all
Speaker 4: these things, all these state actors malevolently trying to cause Well, yes,
Speaker 4: but you know something, I'm also worried about the mistake,
Speaker 4: the fat finger, the unintentional thing, because how do you
Speaker 4: build it. It's hard to build in safeguards because the
Speaker 4: more safeguards that you build, the more repose and relaxed
Speaker 4: you get about each one of them. And nobody can
Speaker 4: find out that no one's doing there, no one's doing
Speaker 4: their job.
Speaker 2: I mean, it seems inevitable to me now that AI
Speaker 2: is going to become more and more of banks risk
Speaker 2: management or back office systems. Like what parts of a
Speaker 2: bank would you feel comfortable outsourcing to everything?
Speaker 4: Shy of the job I had? Okay, go on, you know,
Speaker 4: we don't know. I mean, the greatest technologists today aren't
Speaker 4: sure themselves where it'll go. But you're going to look,
Speaker 4: if you think about it, are brains, We're just wiring.
Speaker 4: We're just code. We're a lot of lying, We're a
Speaker 4: lot a lot of lines of code, but we're just code.
Speaker 4: And at some point you're crossing too judgment and reasoning,
Speaker 4: and I'm sure will happen. I'm sure it's a lot.
Speaker 4: I'm sure the people who at least until they start
Speaker 4: to walk better than they walk today, the people who
Speaker 4: garden for me, and the massage therapists and the personal
Speaker 4: trainers are safe. Well man, maybe not even personal trainers,
Speaker 4: but everything shy of that is just some you know.
Speaker 4: And then we're gonna just have to and then there'll
Speaker 4: be more jobs that leverage whatever stage of progress we're at.
Speaker 4: You know, once upon a time, not that long ago,
Speaker 4: beginning of the twentieth century, more than half the country
Speaker 4: was involved in agriculture. Guess what. We absorb those people,
Speaker 4: But it's not without stresses and strains. Not everybody who's
Speaker 4: not everybody who's a software programmer is going to be
Speaker 4: a pilates teacher, and so there'll be some stress and dislocation.
Speaker 4: But who knows the way society is going to evolve
Speaker 4: maybe you know, remember, you know, from school, you read
Speaker 4: the Marxist ideal where everybody's gonna only have to work
Speaker 4: four days a week, Marxist ideology, And who knows, maybe
Speaker 4: they'll be Once upon a time there was a six
Speaker 4: day work week even on Wall Street, people came and
Speaker 4: Saturday that's when they did all the back office stuff.
Speaker 4: And maybe we go to a three day work week.
Speaker 4: Maybe we work Once upon a time it was a
Speaker 4: ten hour work day. Now it's an eight hour day.
Speaker 4: Maybe it goes to five. Maybe everybody just works less
Speaker 4: and moans to how I have and that they have
Speaker 4: to work four hours that day. So, by the way,
Speaker 4: it doesn't matter whether we like it or not. It's
Speaker 4: going to happen. So you could spend a lot of
Speaker 4: time mourning for it and regretting it, but it's going
Speaker 4: to happen. But the idea that machine's going to do
Speaker 4: a lot of stuff that we do when I started,
Speaker 4: when I started on Wall Street, you know the tape
Speaker 4: and people don't know. You know, ticker tape? What is
Speaker 4: that ticker tape? Those are the threads that came out. Well,
Speaker 4: once upon a time, that's how you communicated. You communicated
Speaker 4: tickers and you couldn't get it back. So you had
Speaker 4: approofreated very carefully, and you had to make sure that
Speaker 4: the confirmation you were sending to the Central Bank of
Speaker 4: China Beijing didn't go to the Central Bank of China.
Speaker 4: Taiwan and you kill yourself. So I spent three hours
Speaker 4: a day doing that. Nobody spends any time doing that.
Speaker 4: When I practice law, you used to have to go
Speaker 4: and look at every case that ever mentioned a case
Speaker 4: you relied on lest it be have been overruled or criticized.
Speaker 4: I spent days doing that. No one spends minutes doing
Speaker 4: that today. That's progress. It's going to happen, and I
Speaker 4: welcome that, particularly since I've already made my money and
Speaker 4: I'm unemployed.
Speaker 2: Must be nice, Joe. When I first joined Bloomberg, one
Speaker 2: of my key duties was to monitor the fax machinery
Speaker 2: just in case the Bank of Japan sent facts over.
Speaker 5: They still they communicate with I believe.
Speaker 2: It's been automated now.
Speaker 3: One of the versions of the future that people talk
Speaker 3: about is that okay Ai is gonna come. A bunch
Speaker 3: of whide collar jobs are going to be eliminated, and
Speaker 3: there's going to be some sort of like universal basic
Speaker 3: income redistribution so that people can survive. But in theory
Speaker 3: like that would require some taxation, and the handful of
Speaker 3: winners of the AI world like they'd have to find
Speaker 3: some way to tax their wealth. Perhaps, But this gud
Speaker 3: I'm really interested in taxation because, like I pay, a
Speaker 3: good chunk of my salary disappears in taxes. We had
Speaker 3: a good year last year, so we got bonuses. Recently,
Speaker 3: a good chunk immediately disappeared. I'm not going to like.
Speaker 4: So now you're not a social democrat and it's fun.
Speaker 3: It's like, not the end of the world. I don't
Speaker 3: love it, but it's not at the end of the world.
Speaker 3: It's hard for me to wrap my head around people
Speaker 3: who have all the money in the world and still
Speaker 3: optimize their lives about going to the lowest marginal tax
Speaker 3: jurisdic Can you help No, it's you haven't done that,
Speaker 3: but you're.
Speaker 4: Still But I'll just say that's why they have that
Speaker 4: lot of money to begin with, because that's how I
Speaker 4: guess that's how because that's how they think. And also
Speaker 4: they're competitive, fiercely competitive, and they just want to win.
Speaker 4: I mean, actually it's good in a way. I'm glad
Speaker 4: that the Mark Zuckerberg's and you may like or dislike
Speaker 4: these names of people, but the fact is, or Elon Musk,
Speaker 4: they're on the cutting edge and they're still motivated to work.
Speaker 4: Thank goodness. I'm glad they want I'm glad there ares.
Speaker 4: I'm glad they work. But to just extrapolate the points
Speaker 4: you're making, an economic system has to do a couple
Speaker 4: of things, and it has to do a lot of things,
Speaker 4: but two major things. It has to create wealth, and
Speaker 4: then it has to allocate that wealth thus created according
Speaker 4: to the values of society. I think our cap our
Speaker 4: system has done a pretty good job creating wealth. Nobody
Speaker 4: can get out there and figure out what the new
Speaker 4: thing is. And nobody's more ruthless about taking things that fail,
Speaker 4: getting rid of them and repurposing them and getting them
Speaker 4: off the balance sheet and building you know, plowing over
Speaker 4: that airport that no one lands at and making it
Speaker 4: turn it into a walmart. Nobody's better at doing that.
Speaker 4: But where we have done poorly is the allocation of it,
Speaker 4: the allocation of the proceeds. And that's of course where
Speaker 4: a lot of the polarization that we're living through now.
Speaker 4: And you know, so a variety of things, you know,
Speaker 4: you have to you know, obviously progressive taxation is one
Speaker 4: of them. Just building the safety net so things are
Speaker 4: free and available to everything that previously you would have
Speaker 4: had to pay for. So public housing has air conditioning. Now,
Speaker 4: public housing when I grew up didn't have air conditioning.
Speaker 4: So making life better at a base minimum. But that's
Speaker 4: the task, and that's the challenge that we have to
Speaker 4: do to allocate based upon values in a way that
Speaker 4: doesn't dis incentivizing people from working. So at some level
Speaker 4: of taxation, you may be disincentivized from working. Poor Elne
Speaker 4: Musk went back to the shareholders and said, you know,
Speaker 4: I'm only worth five hundred billion dollars because you took
Speaker 4: away my options from the Tesla thing. Give them back
Speaker 4: or else I'm not going to work for Tesla anymore.
Speaker 4: So there and so he got it back, and so
Speaker 4: now he's got that extra stimulus of billions five hundred
Speaker 4: and one to seven hundred and forty nine. So people
Speaker 4: do what they do. But by the way, I'm glad
Speaker 4: he's working, and I'm glady's one of mine. And I
Speaker 4: still can't believe those rocket ships can land in Tanis
Speaker 4: so beautifully, and nobody else seems to be able to
Speaker 4: do it. So bravo, keep on going. I'll give you
Speaker 4: an extra couple of dollars if it'll help you.
Speaker 2: You know, we started this conversation talking about how your
Speaker 2: career trajectory kind of mirrored the rise of globalization. But
Speaker 2: the other thing that mirrored was the rise of trading
Speaker 2: and thick on Wall Street. I'm curious if you have
Speaker 2: any sense nowadays what the next sort of booming business
Speaker 2: is going to be among the investment basedes. Everything kind
Speaker 2: of feels the same. Everything kind of feels flat, like
Speaker 2: is there something that's going to take off.
Speaker 4: It's not the same, but it rhymes, you know, it
Speaker 4: doesn't repeat, but it rhymes. You know. Really, the last generation,
Speaker 4: the you know, the cool kids in town were you know,
Speaker 4: private equity and alternatives feels a little less cool the
Speaker 4: last couple of days. You know, you know, it shifts.
Speaker 4: But there's always you know, we're always ringing out efficiencies
Speaker 4: for things, and we're always figuring out, you know, risk
Speaker 4: versus reward, and so ill liquid stuff look better than
Speaker 4: public market stuff. Then you have a liquidity event where
Speaker 4: people try to sell and they get gated and it's
Speaker 4: not working out so well, and so that goes. I
Speaker 4: don't know, I think, you know, the one of the
Speaker 4: things that AI can't really do is they can't take risk.
Speaker 4: They could tell you, in my opinion, based upon my
Speaker 4: you know, working this algorithm against this huge database, how
Speaker 4: those dice would have rolled and what you know, what
Speaker 4: percentages when you will do these simulations and stuff. But
Speaker 4: at the end of the day, you have to still
Speaker 4: apply judgment. And if we were sitting there having a
Speaker 4: conversation one hundred years ago, by the way, people one
Speaker 4: hundred years from now are going to be around. I
Speaker 4: don't know if they'll be sitting on this chair or
Speaker 4: floating above ground, but they're going to be talking about
Speaker 4: how primitive we were thinking that we're you know, we're
Speaker 4: thinking sitting here, thinking how cool we are today and
Speaker 4: how everything's up to date in Kansas City and everything
Speaker 4: is good and and and and novel. But all this
Speaker 4: is going to look stupid. Could you imagine they carry
Speaker 4: their cell phones? Ha ha ha ha, or could you
Speaker 4: imagine Yeah? I mean, but they'll but some things as
Speaker 4: general principles, Oh, we are going to persist. I think
Speaker 4: they'll be create, create, you know, still, people going to
Speaker 4: still write music and natural you know, people will fill
Speaker 4: in the gaps. If you plug in a song, it'll
Speaker 4: publish another song like that. But will it do something
Speaker 4: radically innovative, I don't know. It's possible. Again, brains are
Speaker 4: lines of code. Maybe they'll just have more lines of
Speaker 4: code and eventually do it. But I do think certain
Speaker 4: things like willingness to take risk, judgment. I've known so
Speaker 4: many brilliant people, and I've known so many people with
Speaker 4: good judgment. It's amazing how infrequently those those come together
Speaker 4: at the same person at the same time.
Speaker 3: Within a given bank, you know, the push pull or
Speaker 3: the tug between. Okay, now, banking and deal making is
Speaker 3: hot or trading is hot, and it seems to go
Speaker 3: back and forth, like, is there a direction at Goldman
Speaker 3: or any other bank with the the next leader is
Speaker 3: going to come from It come from the technology.
Speaker 4: So I know yes, Well, first of all, it already
Speaker 4: has in a firm like Goldman, I bet over a
Speaker 4: third of the population of the firm, or engineers it
Speaker 4: was when I was there, wouldn't have gotten less. It
Speaker 4: wouldn't have gotten less in a short in this period
Speaker 4: of time. If anything, it would have gone more in
Speaker 4: that direction. So it already is engineering in an efficiency. Look,
Speaker 4: we're in a world now where in trading and market making,
Speaker 4: a lot of which is done algorithmically by machines. It's
Speaker 4: a millisecond game. If you have your computers a half
Speaker 4: a block closer to the main computers of the platform,
Speaker 4: you win everything because in the even moving at the
Speaker 4: speed of like getting there ahead is so that's already
Speaker 4: been done. But in a firm answer, maybe I'm interping
Speaker 4: your question a little bit. Differently, These things happen at
Speaker 4: different times. So sometimes it's the people who put deals together.
Speaker 4: Sometimes it's the people who finance deals. Sometimes the biggest,
Speaker 4: coolest kids on the block, or the risk managers who
Speaker 4: prevent the firm from discombobulation and manage risk so successfully
Speaker 4: so the other people could do their jobs. In our organization,
Speaker 4: one of the things that I think has helped Goldman
Speaker 4: sacod Agent is that we still the firm is still
Speaker 4: run like it's twenty six years since it was a
Speaker 4: private partnership. Half of my tenures is a private in
Speaker 4: a private partnership, was in a company, but we ran
Speaker 4: the firm as a partnership. Everybody in the firm got
Speaker 4: paid largely on based on how the firm as a
Speaker 4: whole did, not just their narrow area. People who did
Speaker 4: a good job and it wasn't their turn, or the
Speaker 4: market was working the way that they couldn't make money,
Speaker 4: got compensated well for doing a good job, even if
Speaker 4: the opportunity wasn't there. And if it was an easy
Speaker 4: market to make money in and they weren't doing a
Speaker 4: good job and didn't do well, it didn't matter that
Speaker 4: they did well, you know. In other words, we looked
Speaker 4: at the firm as a whole. People had to look
Speaker 4: out for each other. Place was run as a partnership.
Speaker 4: That's very helpful. If you have a firm full of
Speaker 4: people who are owners, everyone is looking around what the
Speaker 4: people next to them are doing, and if they see
Speaker 4: bad behavior, if something's not right, they demand information about
Speaker 4: the whole firm, not just their narrow area, and they
Speaker 4: give you opinions even when you don't want to hear it.
Speaker 4: And guess what, it's a little bit slower and harder
Speaker 4: to run that organization. But I think you get a
Speaker 4: better you get a better outcome.
Speaker 2: Now that the book is officially published, it's been a
Speaker 2: whole eighteen hours I suppose, since it's been published. But
Speaker 2: is there anything with the benefit of that eighteen hours
Speaker 2: of daylight and reminiscence that you wish you had included
Speaker 2: in the book, and that you left out. I want
Speaker 2: the really.
Speaker 4: Good people always telling me. I told you know, we
Speaker 4: had you know, Bloomberg was very nice enough. My Bloomberg
Speaker 4: the man, not necessarily. The company hosted an event last
Speaker 4: night and I thought of a Bloomberg. There was a
Speaker 4: story that I told that at the end of it,
Speaker 4: and I could tell you the story, but please, Okay,
Speaker 4: a million years ago, when the first Bloomberg terminals came
Speaker 4: out and I was a fairly junior person, they put
Speaker 4: a Bloomberg turbo in front of me that about nine
Speaker 4: hundred people were supposed to share. But it was right
Speaker 4: in front of me, and everybody was walking by it
Speaker 4: like they were walking Remember the movie two thousand and
Speaker 4: one of Space odyesstly, remember the obelist the obelisk, and
Speaker 4: everyone's doing this. Everybody was doing that. And I finally
Speaker 4: figured out how to use it. I put yellow pastins
Speaker 4: on it with my schedule and numbers that I had
Speaker 4: to look out for. In other words, I couldn't turn
Speaker 4: I didn't know how to turn on the machine. But
Speaker 4: I was using it as a as a bulletin board.
Speaker 4: And then somebody calls up and he said, Lloyd phoned
Speaker 4: line so and so who is it Bloomberg? So I said,
Speaker 4: I'll call call him back and said, no, no, it's
Speaker 4: Bloomberg the person, not Bloomberg the company. And it was
Speaker 4: Michael Bloomberg. And he calls me and he called up
Speaker 4: and I get on the phone and he said, I
Speaker 4: noticed you had we noticed you haven't turned on your machine.
Speaker 4: And I said, oh my god, where's the camera? I said, well,
Speaker 4: we could tell dig and I said and I said, well,
Speaker 4: and so you're calling me and he goes, oh, no,
Speaker 4: we do the way here. And I don't know if
Speaker 4: they do it today, but in early Bloomberg he had
Speaker 4: all the senior people in the organization. Every day they
Speaker 4: had to call five customers each one and call them
Speaker 4: and discuss. And I said, I said, you know, wow,
Speaker 4: I promise I'll turn on machine. Probably about two years
Speaker 4: later I figured out how to do it. But I'll
Speaker 4: turn on the machine. But I said, isn't that a
Speaker 4: very in a few of your time, because here you
Speaker 4: are calling me and I wasn't a senior guys, And
Speaker 4: he goes, no, no, we learn a lot about the business.
Speaker 4: I've realized now that was a very stupid comment, because
Speaker 4: here I am, first of all, everybody on our floor
Speaker 4: knew that Mike had called, and that he cared. The
Speaker 4: guy whose name was on the door cared about whether
Speaker 4: we're using or not, and not only laterally across that
Speaker 4: dimension everybody knew. But here I am, thirty five years
Speaker 4: later telling the story, and so now you're hearing about it.
Speaker 4: That was a very good use of three minutes of
Speaker 4: Michael Bloomberg, that I'm telling that story about his care
Speaker 4: and then so to me, I know how Bloomberg got built,
Speaker 4: and so that was a lesson I learned. So I
Speaker 4: told that story and then I said, you know, Mike,
Speaker 4: this book is so good and has so many good
Speaker 4: stories that that one didn't even make it in the book.
Speaker 4: It's on the cutting room floor. If it sells well,
Speaker 4: maybe volume two or volume three.
Speaker 5: Well, we went a couple of minutes over, but that
Speaker 5: it was a good story.
Speaker 2: That was a good for both the book and for Bloomberg.
Speaker 5: So thank you, I know, my audience, Lloyd blank Fine,
Speaker 5: thank you so much.
Speaker 4: Thanks very much.
Speaker 2: That was our conversation with former Goldman Sachs CEO Lloyd Blankfine,
Speaker 2: recorded live on March third at Bloomberg invest I'm Tracy Alloway,
Speaker 2: you can follow me at Tracy Alloway.
Speaker 3: And I'm Jill Wisenthal. You can follow me at the Stalwart,
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