WEBVTT - Michael Lewis Explains It All: The SBF Trial, Crypto, and his new book Going Infinite 0:00:04.840 --> 0:00:07.720 Hi everyone. I'm Katie Couric, and I'm very excited to 0:00:07.720 --> 0:00:10.840 tell you that the new season of Next Question is 0:00:11.039 --> 0:00:13.640 on its way. But to tide you over, I have 0:00:13.720 --> 0:00:17.200 the hottest ticket in town, and that's an interview with 0:00:17.239 --> 0:00:20.599 the one and only Michael Lewis. You know him, you 0:00:20.840 --> 0:00:23.440 love him. You've heard of all of his books, like 0:00:23.600 --> 0:00:27.040 The blind Side, Moneyball, The Big Short. Well, now he's 0:00:27.040 --> 0:00:30.640 got a new one out and his timing, can I say, 0:00:30.760 --> 0:00:34.720 could not be better. It's called Going Infinite, The Rise 0:00:34.800 --> 0:00:38.640 and Fall of a New Tycoon. Here is our conversation. 0:00:39.000 --> 0:00:42.480 I had so much fun talking to Michael Lewis. Now 0:00:42.520 --> 0:00:45.720 I understand crypto a little bit better, and I hope 0:00:45.720 --> 0:00:48.920 you all have as much fun listening to our conversation. 0:00:49.840 --> 0:00:57.720 Here it is hellos. Oh no, you're good. You're good. 0:00:57.760 --> 0:01:00.440 You can relax. So should we go? You guys? Are 0:01:00.440 --> 0:01:05.920 we ready? Okay? All right? Wow? Michael Lewis, how many 0:01:05.959 --> 0:01:06.800 books have you written? 0:01:06.840 --> 0:01:08.080 By the way, I don't know. 0:01:08.280 --> 0:01:10.680 I looked it up and it kept going and going 0:01:10.760 --> 0:01:11.640 and going and going. 0:01:11.720 --> 0:01:14.760 It's just I don't know, and they've a distinction needs 0:01:14.800 --> 0:01:16.400 to be made. There's a list there in the front 0:01:16.400 --> 0:01:18.759 of the in front of this book. Some of them 0:01:18.760 --> 0:01:22.199 are books and some of them are a book like objects. 0:01:21.680 --> 0:01:24.240 They I mean, so it's one thing to sit down 0:01:24.280 --> 0:01:28.200 like this and plot creates structure old book. It's another 0:01:28.240 --> 0:01:31.000 to write four magazine articles and put them together in 0:01:31.040 --> 0:01:34.920 a book. And so Boomerang or the Fifth Risk or 0:01:35.200 --> 0:01:38.000 the Money Culture, those are all I mean, don't I'll 0:01:38.000 --> 0:01:40.160 defend them. But they were booklike objects. 0:01:39.959 --> 0:01:41.840 All right, I have sixteen I counted. 0:01:41.560 --> 0:01:42.720 On the sixteen things. 0:01:42.959 --> 0:01:45.800 Yes, six No, well sixteen. I think most of these 0:01:45.800 --> 0:01:46.279 were books. 0:01:46.360 --> 0:01:48.720 Yeah, sixteen items, and I bet six of them were 0:01:48.720 --> 0:01:49.680 book like objects. 0:01:49.760 --> 0:01:54.639 Really, yes, Well, talk about the stars aligning. Your book 0:01:54.880 --> 0:01:59.280 is coming out at the same time, Sam Bankman Freed 0:01:59.560 --> 0:02:02.200 is on trial. I mean, did you all plan this? 0:02:02.400 --> 0:02:04.280 Was this serendipitous? How did this happen? 0:02:04.880 --> 0:02:07.040 We kind of planned it. I started writing this thing 0:02:07.080 --> 0:02:09.800 at the end of January, and I know it usually 0:02:09.840 --> 0:02:12.280 takes me six months once I've got all my stuff, 0:02:12.880 --> 0:02:14.800 and so I knew when i'd have it finished. So 0:02:14.800 --> 0:02:17.040 they knew when they arranged then it was coming on 0:02:17.120 --> 0:02:20.480 the fall, and they announced the trial date, and it 0:02:20.560 --> 0:02:25.079 seemed made sense. Oddly, the trial was supposed to start Monday, 0:02:25.280 --> 0:02:27.280 but the judge has some personal reason he wanted to 0:02:27.320 --> 0:02:29.919 start at Tuesday, so we actually start. The book was 0:02:29.960 --> 0:02:33.000 launched on the day of the trial, so as part 0:02:33.000 --> 0:02:35.400 of me kills me that I'm not there, because I've 0:02:35.400 --> 0:02:38.919 seen the list of the prosecutors' witnesses who were there 0:02:39.080 --> 0:02:43.080 likely to call, and it maps very closely on the 0:02:43.160 --> 0:02:45.560 characters in the book. So it'd be like watching, you know, 0:02:45.720 --> 0:02:47.840 characters from a novel come to life or something like that. 0:02:47.960 --> 0:02:48.840 It feels like that. 0:02:49.080 --> 0:02:51.839 We're going to get into the intricacies a little bit 0:02:52.200 --> 0:02:55.520 simplified of the trial and the crimes, et cetera. But 0:02:55.600 --> 0:02:58.919 I want to go back to the beginning, Michael, because 0:02:59.120 --> 0:03:02.560 you're almost a little anthropologist. I find your book so 0:03:02.680 --> 0:03:06.200 interesting because I think, in fairness, I saw this on 0:03:06.280 --> 0:03:09.200 sixty minutes. But you take a character and that character 0:03:09.360 --> 0:03:15.680 becomes emblematic of another big issue. And you met with 0:03:16.200 --> 0:03:20.079 this young man more than one hundred times over two years. 0:03:20.120 --> 0:03:23.120 So if you had to use one word to describe 0:03:23.240 --> 0:03:27.280 what your experience, what your time was like with SBF 0:03:27.360 --> 0:03:29.520 as he's called, what word would that be? 0:03:30.400 --> 0:03:34.600 I'm excuse a strange one satiric in that right from 0:03:34.639 --> 0:03:38.360 the beginning, He struck me as walking social satire. He 0:03:38.400 --> 0:03:40.920 had acquired. He'd gone from zero to having twenty two 0:03:41.080 --> 0:03:44.800 billion dollars in about eighteen months, and all of society 0:03:44.840 --> 0:03:48.280 had reorganized itself around this pile of money. And everywhere 0:03:48.320 --> 0:03:50.640 he goes what is either happening to him or his 0:03:50.720 --> 0:03:53.600 observations because he's a bit, he's a Martian, he comes 0:03:53.600 --> 0:03:55.440 from another planet, and he sees the world in just 0:03:55.480 --> 0:04:00.200 a different way. It felt like social satire, so satiric. Well, 0:04:00.640 --> 0:04:03.400 I mean, it's gonna sound very odd given these circumstances. 0:04:04.400 --> 0:04:07.440 It was funny. I mean it was a funny. It 0:04:07.480 --> 0:04:10.240 was a funny funny and sad. You know, funny and 0:04:10.280 --> 0:04:12.800 sad go together. But there was a lot of funny 0:04:13.000 --> 0:04:14.760 and so satiric, that's. 0:04:14.600 --> 0:04:18.240 The thing, and surreal and something that almost sounds like 0:04:18.880 --> 0:04:20.880 the pages of a Tom Wolfe novel. 0:04:21.000 --> 0:04:21.440 Honestly. 0:04:21.640 --> 0:04:24.440 So, I just watched a documentary about Tom Wolf. You're 0:04:24.440 --> 0:04:27.680 heavily featured. I loved it. By the way, it was 0:04:27.720 --> 0:04:30.880 based on your profile of Tom Wolf in Vanity Fair. 0:04:31.520 --> 0:04:35.720 And you know, as I read about Sam, I thought, whoa, 0:04:36.400 --> 0:04:39.240 this is the kind of thing Tom Wolf, the kind 0:04:39.279 --> 0:04:43.000 of person Tom Wolf would have been all over. Do 0:04:43.040 --> 0:04:43.560 you agree? 0:04:43.680 --> 0:04:46.280 I agree, especially early Wolf. You know, he wrote these 0:04:46.320 --> 0:04:50.719 pieces that were fabulous about Silicon Valley people right before 0:04:51.040 --> 0:04:53.760 before the Internet. Right it was like the semiconductor people. 0:04:54.240 --> 0:04:56.279 It was like, these people are of the moment and 0:04:56.320 --> 0:04:59.600 they're changing the culture in some way. Also, the Mary 0:04:59.600 --> 0:05:02.080 pranks that crowd, I mean, this is a version of 0:05:02.120 --> 0:05:03.880 the Mary Pranksters. I mean these people who are rolling 0:05:03.880 --> 0:05:07.400 through the world just creating disruption wherever they go. He 0:05:07.440 --> 0:05:10.279 would have been drawn to Sambangman Freed. So yes, I 0:05:10.279 --> 0:05:11.440 think that's completely true. 0:05:11.839 --> 0:05:15.640 Do you think that SBF represents capitalism at its worst? 0:05:16.480 --> 0:05:20.840 In a way, it represents capitalism and it's most chaotic, 0:05:21.880 --> 0:05:24.719 And there's a reason for them. He was drawn to 0:05:24.800 --> 0:05:28.880 chaos when he figured out that he excelled relative to 0:05:28.920 --> 0:05:33.160 other people in these semi chaotic environments where his math 0:05:33.200 --> 0:05:36.120 he brain still was useful, but he needed it to 0:05:36.160 --> 0:05:38.680 be really messy at the same time. It couldn't be orderly, 0:05:38.800 --> 0:05:42.839 couldn't be structured, couldn't be perfectly predictable. When he figure 0:05:42.880 --> 0:05:45.000 that out, figure that out on Wall Street when he's 0:05:45.000 --> 0:05:48.400 twenty one years old, he then proceeds to create those 0:05:48.520 --> 0:05:50.000 environments in which he'll succeed. 0:05:50.560 --> 0:05:52.240 So he thrives in chaos. 0:05:52.240 --> 0:05:54.440 He for thrives in mess and chaos, and he knows 0:05:54.480 --> 0:05:57.760 that everybody else doesn't so at some level, and so 0:05:57.880 --> 0:06:01.479 he feels most comfortable when that it's the environment. He's 0:06:01.520 --> 0:06:05.240 also capitalism at its most current. I mean, if you 0:06:05.279 --> 0:06:07.359 think about history, just put him in some sort of 0:06:07.440 --> 0:06:09.800 historical context, you think, oh, this is just how it 0:06:09.839 --> 0:06:12.000 is now. Mark Zuckerberg is a bit like this. He 0:06:12.040 --> 0:06:14.560 came out of nowhere and it had billions of dollars instantly. 0:06:15.160 --> 0:06:17.960 But that doesn't really happen in history. Like most people 0:06:17.960 --> 0:06:21.359 who got this rich, they had to like dig oil 0:06:21.400 --> 0:06:26.360 out of grounds, right, build railroads, build stuff, build companies. 0:06:27.560 --> 0:06:32.960 This instant acquisition of a fortune is so peculiarly of now. 0:06:33.200 --> 0:06:36.200 And what's so among the things that are so odd 0:06:36.240 --> 0:06:39.800 about it is that the person who in possession of 0:06:39.800 --> 0:06:43.200 the fortune is a stranger to the world, like nobody 0:06:43.240 --> 0:06:46.279 knows who they are. He goes from being nobody and 0:06:46.320 --> 0:06:48.960 he has no social relations kind of thing to being 0:06:49.000 --> 0:06:53.240 at the center of some universe instantly before anybody has 0:06:53.240 --> 0:06:55.400 a chance to figure out should he be. You know. 0:06:56.520 --> 0:07:00.239 So that's a curious feature of modern capitalism. I think. 0:07:00.880 --> 0:07:03.159 So you meet this guy, you guys, take a walk, 0:07:03.360 --> 0:07:06.800 you take a hike in California. Tell me what was 0:07:06.800 --> 0:07:07.760 your first impression. 0:07:08.320 --> 0:07:12.280 First impression was there's a kind of artlessness about him, 0:07:12.560 --> 0:07:15.600 and an openness and a willingness to answer. Talk about 0:07:15.640 --> 0:07:18.360 things that normally people just wouldn't be easy talking about, 0:07:18.360 --> 0:07:20.160 like how much money he had, where to come from, 0:07:20.240 --> 0:07:22.800 how crazy it was he had it that his parents 0:07:22.800 --> 0:07:24.160 didn't know what to make of it, because they were 0:07:24.200 --> 0:07:26.560 two professors at Stanford, and he was raised not caring 0:07:26.600 --> 0:07:30.360 about money, and so first impression was very He was 0:07:30.400 --> 0:07:34.200 also very peculiar that he was disheveled when he came out. 0:07:34.240 --> 0:07:36.600 He look, he always looks like he just fell out 0:07:36.640 --> 0:07:37.680 of a dumpster, right. 0:07:37.560 --> 0:07:39.560 I mean he's got he looks like an unmade bed. 0:07:39.720 --> 0:07:42.720 Oh my god, yes, yeah, an unimated bed on top 0:07:42.720 --> 0:07:45.960 of an unmade bed. He looks. And it was the 0:07:46.040 --> 0:07:49.960 total absence of interest in his own appearance, the total 0:07:50.040 --> 0:07:53.280 in his head noss. So normally, when you meet somebody, 0:07:53.960 --> 0:07:57.920 it's an exchange, right, they asked questions about you, you 0:07:57.960 --> 0:07:59.280 ask questions about them. 0:07:59.640 --> 0:08:01.640 Let me get yes, he asked you no questions. 0:08:01.520 --> 0:08:04.119 Zero, and we are, I'm going to tell you something. 0:08:04.600 --> 0:08:07.000 Two years later, he's still not asked me any questions. 0:08:07.360 --> 0:08:10.640 So as far as anyone knows nothing about me and 0:08:10.960 --> 0:08:13.200 knows nothing about what I was writing about, but he 0:08:13.320 --> 0:08:15.920 never asked me like, what's the book gonna look like? Nothing? 0:08:16.480 --> 0:08:18.080 So it was all one way. 0:08:18.840 --> 0:08:21.840 It's so interesting because he's this odd combination. And we'll 0:08:21.880 --> 0:08:23.640 talk about this in a moment too. And I want 0:08:23.680 --> 0:08:26.840 to get too ahead of myself, an incredible desire to 0:08:26.880 --> 0:08:30.760 do good without any emotional intelligence. Yeah, that's true, like 0:08:30.800 --> 0:08:35.600 this strange combination. Yes, Well, let's talk about his childhood. 0:08:35.720 --> 0:08:38.880 As you mentioned, his parents were two Stanford law professors 0:08:39.200 --> 0:08:42.560 who I guess are having their own legal problems right now, right, 0:08:42.640 --> 0:08:46.160 I mean, they've been sued for their involvement in this 0:08:46.280 --> 0:08:50.320 whole enterprise. But tell us about where he grew up, 0:08:50.480 --> 0:08:53.839 what his life was like, and I'm curious about the 0:08:53.960 --> 0:08:57.480 nurture nature aspect of him. Help us understand him. 0:08:57.960 --> 0:09:02.920 His parents both tax law professor is Stanford. That sounds boring, well, 0:09:04.280 --> 0:09:07.520 unless unless that's your cup of tea, right, Yeah, And 0:09:07.520 --> 0:09:09.560 the kind of person for whom that's like a cup 0:09:09.559 --> 0:09:11.200 of tea is a different kind of person. They like 0:09:11.240 --> 0:09:13.120 to live in their head, and tax law does get 0:09:13.160 --> 0:09:16.199 to kind of like structure of society, questions like how 0:09:16.240 --> 0:09:19.800 you distribute wealth, And it's not just it isn't just 0:09:19.880 --> 0:09:22.280 like wooden numbers. And it wasn't just it isn't just numbers, 0:09:22.320 --> 0:09:25.560 it's ideas. They there are two people who live for ideas. 0:09:25.720 --> 0:09:28.319 To all the tax lawyers out there, I deeply apologize. 0:09:29.480 --> 0:09:30.240 Do I need to too? 0:09:30.400 --> 0:09:34.080 I mean, no, you're you're defending them insane. It's ideas. 0:09:34.080 --> 0:09:36.800 But they've sat in the middle of actually pretty active, 0:09:36.880 --> 0:09:40.800 interesting social circle. They were very social people. Their dinner 0:09:40.840 --> 0:09:43.240 parties on Sunday nights were famous on the Stanford campus. 0:09:43.760 --> 0:09:47.400 Their son struck even their friends as peculiar right from 0:09:47.440 --> 0:09:51.240 the beginning, and one comment that stuck with me is 0:09:51.320 --> 0:09:53.960 one of the distinguished guests that the Sunday night dinner 0:09:54.000 --> 0:09:57.720 party said he always thought that the parents were afraid 0:09:57.800 --> 0:10:00.400 for and of Sam like they did, and that they 0:10:00.400 --> 0:10:02.200 were worried about where he was going to end up 0:10:02.200 --> 0:10:05.160 in the world because he didn't make social connections. He 0:10:05.200 --> 0:10:07.960 was so isolated as a kid, and the feeling of 0:10:07.960 --> 0:10:10.800 his childhood to me talking to him and to those 0:10:10.840 --> 0:10:12.440 around him was that he was just waiting for it 0:10:12.480 --> 0:10:14.959 to end, that he was waiting for everybody else to 0:10:15.000 --> 0:10:16.880 grow up around him so that he would have people 0:10:16.920 --> 0:10:19.760 to talk to, because he did not ever connect to peers. 0:10:20.320 --> 0:10:24.160 He had one friend, and the one friend was a 0:10:24.400 --> 0:10:27.440 child of his parents' friends, so they were kind of 0:10:27.440 --> 0:10:30.679 put together that way, and they were connected through this 0:10:30.760 --> 0:10:32.880 game they played called Magic the Gathering, which is a 0:10:32.880 --> 0:10:37.400 complicated chao. It's a messy chaos but matthew card game, 0:10:37.920 --> 0:10:39.680 and they didn't really have to talk about much because 0:10:39.679 --> 0:10:42.360 they just played cards together the whole time. So it's 0:10:42.400 --> 0:10:45.120 an unusual childhood. I mean, I asked. 0:10:45.200 --> 0:10:49.200 It doesn't sound necessarily unhappy, just different. 0:10:48.960 --> 0:10:53.080 You know that kept coming back to this. It sounds sad, 0:10:53.520 --> 0:10:58.600 but he's not sad. It sounds almost tragic. He didn't 0:10:58.640 --> 0:11:00.800 feel tragic. He felt like he was living in his 0:11:00.880 --> 0:11:03.320 own head and trying to make sense of the world 0:11:03.360 --> 0:11:08.079 around him in his own peculiar way. So verbally facile 0:11:08.679 --> 0:11:12.640 and so interested in the world around him that and. 0:11:12.640 --> 0:11:15.760 Yet never asked you a question that doesn't really job. 0:11:15.840 --> 0:11:18.920 Yeah, no, it doesn't jibe, but he's interested in ideas. 0:11:20.160 --> 0:11:23.560 We'll be back with more of Michael Lewis. Right after this, 0:11:33.800 --> 0:11:38.160 we're back with author Michael Lewis. Let's talk about his 0:11:38.280 --> 0:11:40.760 sort of rais on detra. So he had a dream 0:11:41.320 --> 0:11:44.400 and that was to make a shitload of money and 0:11:44.480 --> 0:11:47.720 give it away. Something that's called effective altruism, which actually 0:11:47.720 --> 0:11:49.480 I hadn't heard of before. I mean, I know the 0:11:49.720 --> 0:11:53.200 idea of it, you know, but that term. 0:11:53.400 --> 0:11:55.520 Yeah, the movie is fascinating. 0:11:55.400 --> 0:11:57.920 And well tell me, tell me about the movement and 0:11:57.960 --> 0:11:59.360 how he got sucked into it. 0:11:59.520 --> 0:12:02.760 Right, So there's a whole intellectual prehistory we don't need 0:12:02.800 --> 0:12:05.960 to get into. The modern version of it. Is Oxford 0:12:05.960 --> 0:12:10.200 professors two thousand and eight ihs or so start to 0:12:10.200 --> 0:12:13.600 make an argument that very little cost to yourself, you 0:12:13.720 --> 0:12:17.880 middle class English person, could give away money so effectively 0:12:17.960 --> 0:12:20.120 that you know, what might cost you a cup of 0:12:20.120 --> 0:12:22.880 coffee saves a life in Africa. So how can you 0:12:22.920 --> 0:12:25.520 possibly buy that cup of coffee for yourself if you 0:12:25.520 --> 0:12:28.520 could save a life in Africa with that same money. 0:12:29.000 --> 0:12:30.760 And they actually start to make the calculations on their 0:12:30.800 --> 0:12:33.160 own salaries, like if we take everything but what we 0:12:33.200 --> 0:12:36.800 absolutely need to live on, what over our lifetimes, what 0:12:36.880 --> 0:12:39.000 could we accomplish? And it was like we save eighty 0:12:39.080 --> 0:12:42.480 thousand African children from blindness. Then some numbers like that, 0:12:43.080 --> 0:12:46.360 and they start to kind of put these ideas out 0:12:46.640 --> 0:12:50.720 to young people actually, kind of almost like you build 0:12:50.720 --> 0:12:52.200 a religion or a cult. 0:12:52.800 --> 0:12:54.679 When does this whole movement start. 0:12:54.559 --> 0:12:56.880 About two thousand and eight, two thousand and nine. But 0:12:56.880 --> 0:12:59.679 by twenty twelve, when one of these philosophers names Will 0:12:59.720 --> 0:13:02.600 mcgahe gives a talk that Sam here is at MIT. 0:13:02.720 --> 0:13:06.040 It's in Cambridge at Harvard, but he was at MIT mcgaskell. 0:13:06.160 --> 0:13:08.520 It is morphed a little bit. The movement morphs like 0:13:08.559 --> 0:13:11.960 a few times, but this big morph was the idea was, 0:13:12.640 --> 0:13:15.520 all right, you kid, you could go become a doctor 0:13:16.480 --> 0:13:20.040 and go to Africa and in your lifetime you would 0:13:20.080 --> 0:13:24.319 save two hundred people's lives. Or you could go work 0:13:24.320 --> 0:13:26.839 at a high frequency trading from a Wall street and 0:13:26.880 --> 0:13:30.160 make lots of money and pay fifty doctors to go 0:13:30.200 --> 0:13:32.760 to Africa and save fifty times the number of lives. 0:13:33.240 --> 0:13:36.240 So it thought he has earned a give and that's 0:13:36.280 --> 0:13:39.199 the idea that animates Sam. It's like up to that point, 0:13:39.280 --> 0:13:41.160 money's not on his radar screen. It's not like I 0:13:41.200 --> 0:13:43.240 don't really care about it, doesn't think about it. He's 0:13:43.240 --> 0:13:45.600 a kid of two professors at Safford who probably think 0:13:45.600 --> 0:13:48.080 he's going to become a professor. Now where the movement 0:13:48.120 --> 0:13:51.400 gets really a little out there is right after he 0:13:51.440 --> 0:13:54.880 gets into it, it morphs again and they start to 0:13:54.960 --> 0:13:59.360 argue about like the math of saving lives, and yeah, 0:13:59.400 --> 0:14:02.920 you could give your dollars to save that kid's life 0:14:02.920 --> 0:14:06.400 in Africa, but those same dollars could be given to 0:14:06.559 --> 0:14:11.520 reduce certain existential risks to humanity. A pandemic that wipes 0:14:11.559 --> 0:14:16.760 out the species, AI, out of control, climate change, risk 0:14:16.800 --> 0:14:19.520 of nuclear war, and if you can do anything to 0:14:19.600 --> 0:14:23.200 tilt the odds against all future human beings being wiped out, 0:14:23.600 --> 0:14:26.640 the math suggests you should do that rather than safe living, 0:14:26.680 --> 0:14:27.280 breathing ones. 0:14:27.360 --> 0:14:29.720 Now, so it swings to prevention. 0:14:29.960 --> 0:14:32.840 To prevention, that's for to prevention of a thing that's 0:14:32.880 --> 0:14:34.680 going to be very hard to know whether you succeed 0:14:34.720 --> 0:14:36.480 it or not, you know, because what you're trying to 0:14:36.520 --> 0:14:38.520 do is stop something from happening. Right, So, all of 0:14:38.560 --> 0:14:39.960 a sudden, there's a reason not to make just a 0:14:40.000 --> 0:14:43.520 few million that this is like unlimited sums of money. 0:14:43.560 --> 0:14:46.680 Infinite money is what we need. And that's the climate 0:14:46.880 --> 0:14:49.920 in which Sam comes of age and develops his own 0:14:50.160 --> 0:14:50.840 life ambition. 0:14:51.120 --> 0:14:53.040 So he wants more and more and more and more 0:14:53.520 --> 0:14:54.040 for good? 0:14:54.640 --> 0:14:56.080 Is that more and more and more and more. Not 0:14:56.120 --> 0:14:58.120 just more and more and more and more, but the 0:14:58.120 --> 0:15:01.440 the twenty billionth dollar or the trillionth dollar is as 0:15:01.520 --> 0:15:04.600 valuable as the nine hundred and ninety nine billionth dollar. 0:15:04.680 --> 0:15:07.440 That it's just like there's no diminishing returns. 0:15:07.520 --> 0:15:10.680 So that captures his attention, gives him purpose, and he 0:15:10.760 --> 0:15:15.480 settles on two causes, pandemic prevention, which you mentioned, and 0:15:15.520 --> 0:15:17.440 then protecting democracies. 0:15:17.520 --> 0:15:21.040 So that's controversial, right. He has these effective altrus. It 0:15:21.080 --> 0:15:23.800 is a movement. There are thousands of people involved in it. 0:15:23.800 --> 0:15:26.400 It has certain cult like qualities, but it's also kind 0:15:26.400 --> 0:15:29.320 of like an ant culpe because they're all into argument 0:15:29.360 --> 0:15:31.520 and reason. So the movement can change, like someone makes 0:15:31.520 --> 0:15:34.120 a better argument and it goes a different direction, and 0:15:34.160 --> 0:15:36.720 Sam makes a new argument that actually irritates all the 0:15:36.760 --> 0:15:42.720 effective altrus. It's that in addition to climate change, AI, pandemics, asteroids, whatever, 0:15:43.120 --> 0:15:45.120 Donald Trump should be on that list right. 0:15:45.200 --> 0:15:48.680 Well, Basically his argument is that you need government. Government 0:15:48.800 --> 0:15:52.800 is essential, and this is of course arguable and debatable, 0:15:52.840 --> 0:15:55.840 but government is essential to solve some of the most 0:15:55.880 --> 0:15:59.200 intractable societal problems. So we have to protect government, we 0:15:59.240 --> 0:16:03.640 have to proctocracy, and that means basically neutralizing Donald Trump 0:16:03.680 --> 0:16:04.400 at any cost. 0:16:04.560 --> 0:16:06.640 Yeah, that's exactly right, right, Yes, Yes, it's sort of 0:16:06.720 --> 0:16:09.840 like if American democracy fails, democracy is going to fail, 0:16:10.080 --> 0:16:12.960 and democracy is the best tool for addressing these problems. 0:16:13.160 --> 0:16:15.640 And so Donald Trump has his name has been added 0:16:15.680 --> 0:16:19.640 to this list of existential risk to humanity, and he. 0:16:19.680 --> 0:16:24.800 In fact offers fifty billion dollars to five Yeah, fifty 0:16:24.840 --> 0:16:26.960 billion would be pretty hard to resist, wouldn't it. But 0:16:27.440 --> 0:16:32.320 five billion dollars to Donald Trump to not run for 0:16:32.400 --> 0:16:36.280 president of the United States, which apparently gets some traction. 0:16:36.800 --> 0:16:39.400 Who did he meet with people high up in his circle? 0:16:39.600 --> 0:16:40.200 Sam? 0:16:40.720 --> 0:16:40.840 So? 0:16:40.920 --> 0:16:44.000 The way Sam's best I can tell political operation worked 0:16:44.040 --> 0:16:48.080 is it essentially had two almost identical parts, one Republican, 0:16:48.120 --> 0:16:50.320 one Democrat. He hired a bunch of Republicans in one 0:16:50.400 --> 0:16:51.960 silo and a bunch of Democrats in the other, and 0:16:52.040 --> 0:16:56.360 funded them both. And in the Republican silo, I do 0:16:56.520 --> 0:17:00.800 know that the people there met with people very close 0:17:00.840 --> 0:17:01.240 to Trump. 0:17:01.520 --> 0:17:04.800 That I do know that happened So how did Sam 0:17:05.080 --> 0:17:08.080 Bankman Freed make so much money? Everyone thinks he's going 0:17:08.119 --> 0:17:12.480 to be the world's first trillionaire. Let's break down what 0:17:12.720 --> 0:17:17.040 he was doing for the bitcoin challenged, I among them, 0:17:17.440 --> 0:17:20.639 which I now understand more having read your book and 0:17:20.880 --> 0:17:23.480 read a lot of articles about this. But think of 0:17:23.520 --> 0:17:29.400 this as cryptocurrency for dummies. What is exactly is cryptocurrency. 0:17:29.960 --> 0:17:35.280 It's made up money. It's a so it is an 0:17:35.320 --> 0:17:38.720 idea that is hatched by someone. We don't know who 0:17:38.720 --> 0:17:42.080 he is, but his pseudonym was Satoshi Nakamoto in two 0:17:42.119 --> 0:17:46.440 thousand and eight. And the idea is a means of exchange, 0:17:46.640 --> 0:17:49.359 a form of payment of a store of value that 0:17:49.800 --> 0:17:52.199 is not sourced by the government, doesn't come out of 0:17:52.200 --> 0:17:53.800 the government. It's us like this thing. We're going to 0:17:53.800 --> 0:17:57.360 get a digital digital currency. It's a string of digits, 0:17:57.960 --> 0:18:00.800 and we're going to say this is valuable, and it's 0:18:00.880 --> 0:18:04.960 valuable if people believe it's valuable. And when it starts, 0:18:05.000 --> 0:18:07.640 it seems preposterous, like why would anybody want a bitcoin? 0:18:08.359 --> 0:18:11.240 It turns out it's not preposterous. Why would people want 0:18:11.280 --> 0:18:13.200 a bitcoin? That ends up being an answer to the 0:18:13.280 --> 0:18:17.119 question people who were kind of suspicious of governments, of institutions, 0:18:17.119 --> 0:18:20.840 of banks, people who want to hold wealth in ways 0:18:20.880 --> 0:18:23.560 that are hard to detect, people who want to make 0:18:23.600 --> 0:18:27.680 payments without anybody knowing what they've done. That Bitcoin catches 0:18:27.680 --> 0:18:31.200 on with a kind of a smallish group of people 0:18:31.200 --> 0:18:33.000 who have got a religious fervor about it, and it's 0:18:33.040 --> 0:18:36.520 mostly kind of libertarian types. When bitcoin starts to go 0:18:36.640 --> 0:18:39.960 up in price the first place, there's only one digital currency, 0:18:39.960 --> 0:18:40.800 it's just bitcoin. 0:18:40.880 --> 0:18:43.040 In the end, they're now thousands of them, right, And 0:18:43.400 --> 0:18:45.920 he starts as an investor and then figures out there's, 0:18:46.080 --> 0:18:47.760 you know, there's got to be a way to build 0:18:47.760 --> 0:18:50.720 a better mouse trap. So he creates a platform called 0:18:50.840 --> 0:18:51.960 ftx right. 0:18:52.000 --> 0:18:55.560 With that you can think of that as the cryptocurrency casino, right, 0:18:55.840 --> 0:18:57.960 And just to sort of ease your anxiety about all this, 0:18:58.200 --> 0:19:01.000 he didn't know about cryptocurrency care about it. I mean, 0:19:01.000 --> 0:19:04.240 there's a technology underneath it that would take a long 0:19:04.280 --> 0:19:07.080 time to explain. And every time I think I understand it, 0:19:07.119 --> 0:19:09.639 I come back and I think I actually didn't understand 0:19:09.680 --> 0:19:11.640 that as well as I should. He didn't care about 0:19:11.640 --> 0:19:13.280 any of that. It was just a thing that went 0:19:13.359 --> 0:19:15.719 up and down like tulip bulbs in price and then 0:19:15.720 --> 0:19:17.879 he could buy and sell. That's how he gets in, 0:19:18.200 --> 0:19:21.200 and he never really has to understand a whole lot more. 0:19:21.480 --> 0:19:24.080 But what he does see when he gets in is 0:19:24.080 --> 0:19:27.080 that the exchanges like the New York Stock Exchange, but 0:19:27.080 --> 0:19:29.080 there are versions of the New York Stock Exchange for 0:19:29.119 --> 0:19:32.720 cryptocurrencies where you can go and buy and sell cryptocurrencies, 0:19:33.200 --> 0:19:35.880 and those exchanges, a lot of them were kind of flawed. 0:19:36.280 --> 0:19:38.920 They they were risky to trade on. Sometimes they lost 0:19:38.920 --> 0:19:42.040 everybody's money. And he realized that if you created a 0:19:42.080 --> 0:19:45.320 better exchange, you could own the casino. And if you 0:19:45.320 --> 0:19:47.760 own the casino, the way you get paid is every 0:19:47.800 --> 0:19:50.520 time someone comes and makes a bet, you take a 0:19:50.520 --> 0:19:52.880 little piece of it. You get a fee for every 0:19:52.920 --> 0:19:55.800 bet that gets made. And so ultimately they're two hundred 0:19:55.840 --> 0:19:58.280 and fifty billion dollars a month being traded on his 0:19:58.359 --> 0:20:01.240 exchange FTX, and he takes out a tiny percentage, but 0:20:01.280 --> 0:20:03.760 it ends up being a lot of money, so much 0:20:03.800 --> 0:20:07.639 money that in twenty twenty one, he's they have a 0:20:07.640 --> 0:20:10.200 billion dollars in revenues, four hun a million dollars in profits, 0:20:10.240 --> 0:20:13.760 and venture capitalists are investing in him at a rate 0:20:13.800 --> 0:20:17.119 that suggests the company's worth forty billion dollars. And this 0:20:17.160 --> 0:20:19.600 happens in a matter of eighteen months from the time 0:20:19.640 --> 0:20:22.080 he creates it in early twenty nineteen. 0:20:22.280 --> 0:20:25.359 But he had two companies. So he establishes FTX, but 0:20:25.480 --> 0:20:29.159 the first company he built was called Alameda Alimeter Research, 0:20:29.240 --> 0:20:33.639 Alameda Research, and that's where the trouble began. 0:20:33.960 --> 0:20:36.560 So he starts this his own little trading firm, Alameda. 0:20:36.960 --> 0:20:40.000 Then he starts out of that this exchange and Alameda 0:20:40.080 --> 0:20:42.399 is just one of the traders on the exchange. The 0:20:42.520 --> 0:20:45.680