Speaker 1: Hi everyone. I'm Katie Couric, and I'm very excited to
Speaker 1: tell you that the new season of Next Question is
Speaker 1: on its way. But to tide you over, I have
Speaker 1: the hottest ticket in town, and that's an interview with
Speaker 1: the one and only Michael Lewis. You know him, you
Speaker 1: love him. You've heard of all of his books, like
Speaker 1: The blind Side, Moneyball, The Big Short. Well, now he's
Speaker 1: got a new one out and his timing, can I say,
Speaker 1: could not be better. It's called Going Infinite, The Rise
Speaker 1: and Fall of a New Tycoon. Here is our conversation.
Speaker 1: I had so much fun talking to Michael Lewis. Now
Speaker 1: I understand crypto a little bit better, and I hope
Speaker 1: you all have as much fun listening to our conversation.
Speaker 1: Here it is hellos. Oh no, you're good. You're good.
Speaker 1: You can relax. So should we go? You guys? Are
Speaker 1: we ready? Okay? All right? Wow? Michael Lewis, how many
Speaker 1: books have you written?
Speaker 2: By the way, I don't know.
Speaker 1: I looked it up and it kept going and going
Speaker 1: and going and going.
Speaker 2: It's just I don't know, and they've a distinction needs
Speaker 2: to be made. There's a list there in the front
Speaker 2: of the in front of this book. Some of them
Speaker 2: are books and some of them are a book like objects.
Speaker 2: They I mean, so it's one thing to sit down
Speaker 2: like this and plot creates structure old book. It's another
Speaker 2: to write four magazine articles and put them together in
Speaker 2: a book. And so Boomerang or the Fifth Risk or
Speaker 2: the Money Culture, those are all I mean, don't I'll
Speaker 2: defend them. But they were booklike objects.
Speaker 1: All right, I have sixteen I counted.
Speaker 2: On the sixteen things.
Speaker 1: Yes, six No, well sixteen. I think most of these
Speaker 1: were books.
Speaker 2: Yeah, sixteen items, and I bet six of them were
Speaker 2: book like objects.
Speaker 1: Really, yes, Well, talk about the stars aligning. Your book
Speaker 1: is coming out at the same time, Sam Bankman Freed
Speaker 1: is on trial. I mean, did you all plan this?
Speaker 1: Was this serendipitous? How did this happen?
Speaker 2: We kind of planned it. I started writing this thing
Speaker 2: at the end of January, and I know it usually
Speaker 2: takes me six months once I've got all my stuff,
Speaker 2: and so I knew when i'd have it finished. So
Speaker 2: they knew when they arranged then it was coming on
Speaker 2: the fall, and they announced the trial date, and it
Speaker 2: seemed made sense. Oddly, the trial was supposed to start Monday,
Speaker 2: but the judge has some personal reason he wanted to
Speaker 2: start at Tuesday, so we actually start. The book was
Speaker 2: launched on the day of the trial, so as part
Speaker 2: of me kills me that I'm not there, because I've
Speaker 2: seen the list of the prosecutors' witnesses who were there
Speaker 2: likely to call, and it maps very closely on the
Speaker 2: characters in the book. So it'd be like watching, you know,
Speaker 2: characters from a novel come to life or something like that.
Speaker 2: It feels like that.
Speaker 1: We're going to get into the intricacies a little bit
Speaker 1: simplified of the trial and the crimes, et cetera. But
Speaker 1: I want to go back to the beginning, Michael, because
Speaker 1: you're almost a little anthropologist. I find your book so
Speaker 1: interesting because I think, in fairness, I saw this on
Speaker 1: sixty minutes. But you take a character and that character
Speaker 1: becomes emblematic of another big issue. And you met with
Speaker 1: this young man more than one hundred times over two years.
Speaker 1: So if you had to use one word to describe
Speaker 1: what your experience, what your time was like with SBF
Speaker 1: as he's called, what word would that be?
Speaker 2: I'm excuse a strange one satiric in that right from
Speaker 2: the beginning, He struck me as walking social satire. He
Speaker 2: had acquired. He'd gone from zero to having twenty two
Speaker 2: billion dollars in about eighteen months, and all of society
Speaker 2: had reorganized itself around this pile of money. And everywhere
Speaker 2: he goes what is either happening to him or his
Speaker 2: observations because he's a bit, he's a Martian, he comes
Speaker 2: from another planet, and he sees the world in just
Speaker 2: a different way. It felt like social satire, so satiric. Well,
Speaker 2: I mean, it's gonna sound very odd given these circumstances.
Speaker 2: It was funny. I mean it was a funny. It
Speaker 2: was a funny funny and sad. You know, funny and
Speaker 2: sad go together. But there was a lot of funny
Speaker 2: and so satiric, that's.
Speaker 1: The thing, and surreal and something that almost sounds like
Speaker 1: the pages of a Tom Wolfe novel.
Speaker 2: Honestly.
Speaker 1: So, I just watched a documentary about Tom Wolf. You're
Speaker 1: heavily featured. I loved it. By the way, it was
Speaker 1: based on your profile of Tom Wolf in Vanity Fair.
Speaker 1: And you know, as I read about Sam, I thought, whoa,
Speaker 1: this is the kind of thing Tom Wolf, the kind
Speaker 1: of person Tom Wolf would have been all over. Do
Speaker 1: you agree?
Speaker 2: I agree, especially early Wolf. You know, he wrote these
Speaker 2: pieces that were fabulous about Silicon Valley people right before
Speaker 2: before the Internet. Right it was like the semiconductor people.
Speaker 2: It was like, these people are of the moment and
Speaker 2: they're changing the culture in some way. Also, the Mary
Speaker 2: pranks that crowd, I mean, this is a version of
Speaker 2: the Mary Pranksters. I mean these people who are rolling
Speaker 2: through the world just creating disruption wherever they go. He
Speaker 2: would have been drawn to Sambangman Freed. So yes, I
Speaker 2: think that's completely true.
Speaker 1: Do you think that SBF represents capitalism at its worst?
Speaker 2: In a way, it represents capitalism and it's most chaotic,
Speaker 2: And there's a reason for them. He was drawn to
Speaker 2: chaos when he figured out that he excelled relative to
Speaker 2: other people in these semi chaotic environments where his math
Speaker 2: he brain still was useful, but he needed it to
Speaker 2: be really messy at the same time. It couldn't be orderly,
Speaker 2: couldn't be structured, couldn't be perfectly predictable. When he figure
Speaker 2: that out, figure that out on Wall Street when he's
Speaker 2: twenty one years old, he then proceeds to create those
Speaker 2: environments in which he'll succeed.
Speaker 1: So he thrives in chaos.
Speaker 2: He for thrives in mess and chaos, and he knows
Speaker 2: that everybody else doesn't so at some level, and so
Speaker 2: he feels most comfortable when that it's the environment. He's
Speaker 2: also capitalism at its most current. I mean, if you
Speaker 2: think about history, just put him in some sort of
Speaker 2: historical context, you think, oh, this is just how it
Speaker 2: is now. Mark Zuckerberg is a bit like this. He
Speaker 2: came out of nowhere and it had billions of dollars instantly.
Speaker 2: But that doesn't really happen in history. Like most people
Speaker 2: who got this rich, they had to like dig oil
Speaker 2: out of grounds, right, build railroads, build stuff, build companies.
Speaker 2: This instant acquisition of a fortune is so peculiarly of now.
Speaker 2: And what's so among the things that are so odd
Speaker 2: about it is that the person who in possession of
Speaker 2: the fortune is a stranger to the world, like nobody
Speaker 2: knows who they are. He goes from being nobody and
Speaker 2: he has no social relations kind of thing to being
Speaker 2: at the center of some universe instantly before anybody has
Speaker 2: a chance to figure out should he be. You know.
Speaker 2: So that's a curious feature of modern capitalism. I think.
Speaker 1: So you meet this guy, you guys, take a walk,
Speaker 1: you take a hike in California. Tell me what was
Speaker 1: your first impression.
Speaker 2: First impression was there's a kind of artlessness about him,
Speaker 2: and an openness and a willingness to answer. Talk about
Speaker 2: things that normally people just wouldn't be easy talking about,
Speaker 2: like how much money he had, where to come from,
Speaker 2: how crazy it was he had it that his parents
Speaker 2: didn't know what to make of it, because they were
Speaker 2: two professors at Stanford, and he was raised not caring
Speaker 2: about money, and so first impression was very He was
Speaker 2: also very peculiar that he was disheveled when he came out.
Speaker 2: He look, he always looks like he just fell out
Speaker 2: of a dumpster, right.
Speaker 1: I mean he's got he looks like an unmade bed.
Speaker 2: Oh my god, yes, yeah, an unimated bed on top
Speaker 2: of an unmade bed. He looks. And it was the
Speaker 2: total absence of interest in his own appearance, the total
Speaker 2: in his head noss. So normally, when you meet somebody,
Speaker 2: it's an exchange, right, they asked questions about you, you
Speaker 2: ask questions about them.
Speaker 1: Let me get yes, he asked you no questions.
Speaker 2: Zero, and we are, I'm going to tell you something.
Speaker 2: Two years later, he's still not asked me any questions.
Speaker 2: So as far as anyone knows nothing about me and
Speaker 2: knows nothing about what I was writing about, but he
Speaker 2: never asked me like, what's the book gonna look like? Nothing?
Speaker 2: So it was all one way.
Speaker 1: It's so interesting because he's this odd combination. And we'll
Speaker 1: talk about this in a moment too. And I want
Speaker 1: to get too ahead of myself, an incredible desire to
Speaker 1: do good without any emotional intelligence. Yeah, that's true, like
Speaker 1: this strange combination. Yes, Well, let's talk about his childhood.
Speaker 1: As you mentioned, his parents were two Stanford law professors
Speaker 1: who I guess are having their own legal problems right now, right,
Speaker 1: I mean, they've been sued for their involvement in this
Speaker 1: whole enterprise. But tell us about where he grew up,
Speaker 1: what his life was like, and I'm curious about the
Speaker 1: nurture nature aspect of him. Help us understand him.
Speaker 2: His parents both tax law professor is Stanford. That sounds boring, well,
Speaker 2: unless unless that's your cup of tea, right, Yeah, And
Speaker 2: the kind of person for whom that's like a cup
Speaker 2: of tea is a different kind of person. They like
Speaker 2: to live in their head, and tax law does get
Speaker 2: to kind of like structure of society, questions like how
Speaker 2: you distribute wealth, And it's not just it isn't just
Speaker 2: like wooden numbers. And it wasn't just it isn't just numbers,
Speaker 2: it's ideas. They there are two people who live for ideas.
Speaker 1: To all the tax lawyers out there, I deeply apologize.
Speaker 2: Do I need to too?
Speaker 1: I mean, no, you're you're defending them insane. It's ideas.
Speaker 2: But they've sat in the middle of actually pretty active,
Speaker 2: interesting social circle. They were very social people. Their dinner
Speaker 2: parties on Sunday nights were famous on the Stanford campus.
Speaker 2: Their son struck even their friends as peculiar right from
Speaker 2: the beginning, and one comment that stuck with me is
Speaker 2: one of the distinguished guests that the Sunday night dinner
Speaker 2: party said he always thought that the parents were afraid
Speaker 2: for and of Sam like they did, and that they
Speaker 2: were worried about where he was going to end up
Speaker 2: in the world because he didn't make social connections. He
Speaker 2: was so isolated as a kid, and the feeling of
Speaker 2: his childhood to me talking to him and to those
Speaker 2: around him was that he was just waiting for it
Speaker 2: to end, that he was waiting for everybody else to
Speaker 2: grow up around him so that he would have people
Speaker 2: to talk to, because he did not ever connect to peers.
Speaker 2: He had one friend, and the one friend was a
Speaker 2: child of his parents' friends, so they were kind of
Speaker 2: put together that way, and they were connected through this
Speaker 2: game they played called Magic the Gathering, which is a
Speaker 2: complicated chao. It's a messy chaos but matthew card game,
Speaker 2: and they didn't really have to talk about much because
Speaker 2: they just played cards together the whole time. So it's
Speaker 2: an unusual childhood. I mean, I asked.
Speaker 1: It doesn't sound necessarily unhappy, just different.
Speaker 2: You know that kept coming back to this. It sounds sad,
Speaker 2: but he's not sad. It sounds almost tragic. He didn't
Speaker 2: feel tragic. He felt like he was living in his
Speaker 2: own head and trying to make sense of the world
Speaker 2: around him in his own peculiar way. So verbally facile
Speaker 2: and so interested in the world around him that and.
Speaker 1: Yet never asked you a question that doesn't really job.
Speaker 2: Yeah, no, it doesn't jibe, but he's interested in ideas.
Speaker 1: We'll be back with more of Michael Lewis. Right after this,
Speaker 1: we're back with author Michael Lewis. Let's talk about his
Speaker 1: sort of rais on detra. So he had a dream
Speaker 1: and that was to make a shitload of money and
Speaker 1: give it away. Something that's called effective altruism, which actually
Speaker 1: I hadn't heard of before. I mean, I know the
Speaker 1: idea of it, you know, but that term.
Speaker 2: Yeah, the movie is fascinating.
Speaker 1: And well tell me, tell me about the movement and
Speaker 1: how he got sucked into it.
Speaker 2: Right, So there's a whole intellectual prehistory we don't need
Speaker 2: to get into. The modern version of it. Is Oxford
Speaker 2: professors two thousand and eight ihs or so start to
Speaker 2: make an argument that very little cost to yourself, you
Speaker 2: middle class English person, could give away money so effectively
Speaker 2: that you know, what might cost you a cup of
Speaker 2: coffee saves a life in Africa. So how can you
Speaker 2: possibly buy that cup of coffee for yourself if you
Speaker 2: could save a life in Africa with that same money.
Speaker 2: And they actually start to make the calculations on their
Speaker 2: own salaries, like if we take everything but what we
Speaker 2: absolutely need to live on, what over our lifetimes, what
Speaker 2: could we accomplish? And it was like we save eighty
Speaker 2: thousand African children from blindness. Then some numbers like that,
Speaker 2: and they start to kind of put these ideas out
Speaker 2: to young people actually, kind of almost like you build
Speaker 2: a religion or a cult.
Speaker 1: When does this whole movement start.
Speaker 2: About two thousand and eight, two thousand and nine. But
Speaker 2: by twenty twelve, when one of these philosophers names Will
Speaker 2: mcgahe gives a talk that Sam here is at MIT.
Speaker 2: It's in Cambridge at Harvard, but he was at MIT mcgaskell.
Speaker 2: It is morphed a little bit. The movement morphs like
Speaker 2: a few times, but this big morph was the idea was,
Speaker 2: all right, you kid, you could go become a doctor
Speaker 2: and go to Africa and in your lifetime you would
Speaker 2: save two hundred people's lives. Or you could go work
Speaker 2: at a high frequency trading from a Wall street and
Speaker 2: make lots of money and pay fifty doctors to go
Speaker 2: to Africa and save fifty times the number of lives.
Speaker 2: So it thought he has earned a give and that's
Speaker 2: the idea that animates Sam. It's like up to that point,
Speaker 2: money's not on his radar screen. It's not like I
Speaker 2: don't really care about it, doesn't think about it. He's
Speaker 2: a kid of two professors at Safford who probably think
Speaker 2: he's going to become a professor. Now where the movement
Speaker 2: gets really a little out there is right after he
Speaker 2: gets into it, it morphs again and they start to
Speaker 2: argue about like the math of saving lives, and yeah,
Speaker 2: you could give your dollars to save that kid's life
Speaker 2: in Africa, but those same dollars could be given to
Speaker 2: reduce certain existential risks to humanity. A pandemic that wipes
Speaker 2: out the species, AI, out of control, climate change, risk
Speaker 2: of nuclear war, and if you can do anything to
Speaker 2: tilt the odds against all future human beings being wiped out,
Speaker 2: the math suggests you should do that rather than safe living,
Speaker 2: breathing ones.
Speaker 1: Now, so it swings to prevention.
Speaker 2: To prevention, that's for to prevention of a thing that's
Speaker 2: going to be very hard to know whether you succeed
Speaker 2: it or not, you know, because what you're trying to
Speaker 2: do is stop something from happening. Right, So, all of
Speaker 2: a sudden, there's a reason not to make just a
Speaker 2: few million that this is like unlimited sums of money.
Speaker 2: Infinite money is what we need. And that's the climate
Speaker 2: in which Sam comes of age and develops his own
Speaker 2: life ambition.
Speaker 1: So he wants more and more and more and more
Speaker 1: for good?
Speaker 2: Is that more and more and more and more. Not
Speaker 2: just more and more and more and more, but the
Speaker 2: the twenty billionth dollar or the trillionth dollar is as
Speaker 2: valuable as the nine hundred and ninety nine billionth dollar.
Speaker 2: That it's just like there's no diminishing returns.
Speaker 1: So that captures his attention, gives him purpose, and he
Speaker 1: settles on two causes, pandemic prevention, which you mentioned, and
Speaker 1: then protecting democracies.
Speaker 2: So that's controversial, right. He has these effective altrus. It
Speaker 2: is a movement. There are thousands of people involved in it.
Speaker 2: It has certain cult like qualities, but it's also kind
Speaker 2: of like an ant culpe because they're all into argument
Speaker 2: and reason. So the movement can change, like someone makes
Speaker 2: a better argument and it goes a different direction, and
Speaker 2: Sam makes a new argument that actually irritates all the
Speaker 2: effective altrus. It's that in addition to climate change, AI, pandemics, asteroids, whatever,
Speaker 2: Donald Trump should be on that list right.
Speaker 1: Well, Basically his argument is that you need government. Government
Speaker 1: is essential, and this is of course arguable and debatable,
Speaker 1: but government is essential to solve some of the most
Speaker 1: intractable societal problems. So we have to protect government, we
Speaker 1: have to proctocracy, and that means basically neutralizing Donald Trump
Speaker 1: at any cost.
Speaker 2: Yeah, that's exactly right, right, Yes, Yes, it's sort of
Speaker 2: like if American democracy fails, democracy is going to fail,
Speaker 2: and democracy is the best tool for addressing these problems.
Speaker 2: And so Donald Trump has his name has been added
Speaker 2: to this list of existential risk to humanity, and he.
Speaker 1: In fact offers fifty billion dollars to five Yeah, fifty
Speaker 1: billion would be pretty hard to resist, wouldn't it. But
Speaker 1: five billion dollars to Donald Trump to not run for
Speaker 1: president of the United States, which apparently gets some traction.
Speaker 1: Who did he meet with people high up in his circle?
Speaker 2: Sam?
Speaker 1: So?
Speaker 2: The way Sam's best I can tell political operation worked
Speaker 2: is it essentially had two almost identical parts, one Republican,
Speaker 2: one Democrat. He hired a bunch of Republicans in one
Speaker 2: silo and a bunch of Democrats in the other, and
Speaker 2: funded them both. And in the Republican silo, I do
Speaker 2: know that the people there met with people very close
Speaker 2: to Trump.
Speaker 1: That I do know that happened So how did Sam
Speaker 1: Bankman Freed make so much money? Everyone thinks he's going
Speaker 1: to be the world's first trillionaire. Let's break down what
Speaker 1: he was doing for the bitcoin challenged, I among them,
Speaker 1: which I now understand more having read your book and
Speaker 1: read a lot of articles about this. But think of
Speaker 1: this as cryptocurrency for dummies. What is exactly is cryptocurrency.
Speaker 2: It's made up money. It's a so it is an
Speaker 2: idea that is hatched by someone. We don't know who
Speaker 2: he is, but his pseudonym was Satoshi Nakamoto in two
Speaker 2: thousand and eight. And the idea is a means of exchange,
Speaker 2: a form of payment of a store of value that
Speaker 2: is not sourced by the government, doesn't come out of
Speaker 2: the government. It's us like this thing. We're going to
Speaker 2: get a digital digital currency. It's a string of digits,
Speaker 2: and we're going to say this is valuable, and it's
Speaker 2: valuable if people believe it's valuable. And when it starts,
Speaker 2: it seems preposterous, like why would anybody want a bitcoin?
Speaker 2: It turns out it's not preposterous. Why would people want
Speaker 2: a bitcoin? That ends up being an answer to the
Speaker 2: question people who were kind of suspicious of governments, of institutions,
Speaker 2: of banks, people who want to hold wealth in ways
Speaker 2: that are hard to detect, people who want to make
Speaker 2: payments without anybody knowing what they've done. That Bitcoin catches
Speaker 2: on with a kind of a smallish group of people
Speaker 2: who have got a religious fervor about it, and it's
Speaker 2: mostly kind of libertarian types. When bitcoin starts to go
Speaker 2: up in price the first place, there's only one digital currency,
Speaker 2: it's just bitcoin.
Speaker 1: In the end, they're now thousands of them, right, And
Speaker 1: he starts as an investor and then figures out there's,
Speaker 1: you know, there's got to be a way to build
Speaker 1: a better mouse trap. So he creates a platform called
Speaker 1: ftx right.
Speaker 2: With that you can think of that as the cryptocurrency casino, right,
Speaker 2: And just to sort of ease your anxiety about all this,
Speaker 2: he didn't know about cryptocurrency care about it. I mean,
Speaker 2: there's a technology underneath it that would take a long
Speaker 2: time to explain. And every time I think I understand it,
Speaker 2: I come back and I think I actually didn't understand
Speaker 2: that as well as I should. He didn't care about
Speaker 2: any of that. It was just a thing that went
Speaker 2: up and down like tulip bulbs in price and then
Speaker 2: he could buy and sell. That's how he gets in,
Speaker 2: and he never really has to understand a whole lot more.
Speaker 2: But what he does see when he gets in is
Speaker 2: that the exchanges like the New York Stock Exchange, but
Speaker 2: there are versions of the New York Stock Exchange for
Speaker 2: cryptocurrencies where you can go and buy and sell cryptocurrencies,
Speaker 2: and those exchanges, a lot of them were kind of flawed.
Speaker 2: They they were risky to trade on. Sometimes they lost
Speaker 2: everybody's money. And he realized that if you created a
Speaker 2: better exchange, you could own the casino. And if you
Speaker 2: own the casino, the way you get paid is every
Speaker 2: time someone comes and makes a bet, you take a
Speaker 2: little piece of it. You get a fee for every
Speaker 2: bet that gets made. And so ultimately they're two hundred
Speaker 2: and fifty billion dollars a month being traded on his
Speaker 2: exchange FTX, and he takes out a tiny percentage, but
Speaker 2: it ends up being a lot of money, so much
Speaker 2: money that in twenty twenty one, he's they have a
Speaker 2: billion dollars in revenues, four hun a million dollars in profits,
Speaker 2: and venture capitalists are investing in him at a rate
Speaker 2: that suggests the company's worth forty billion dollars. And this
Speaker 2: happens in a matter of eighteen months from the time
Speaker 2: he creates it in early twenty nineteen.
Speaker 1: But he had two companies. So he establishes FTX, but
Speaker 1: the first company he built was called Alameda Alimeter Research,
Speaker 1: Alameda Research, and that's where the trouble began.
Speaker 2: So he starts this his own little trading firm, Alameda.
Speaker 2: Then he starts out of that this exchange and Alameda
Speaker 2: is just one of the traders on the exchange. The
Speaker 2: problem was when he started FTX, he couldn't get bank
Speaker 2: accounts like dollar bank accounts for FTX. So if you, Katie,
Speaker 2: wanted to put your money on FTX to start to
Speaker 2: buy cryptocurrencies, there was no account at FTX you could
Speaker 2: wire your dollars to or bring your dollars to. They
Speaker 2: would hold the doll that could then be turned into cryptocurrency.
Speaker 2: I mean you physically couldn't turn up right. You can
Speaker 2: go from in Hong Kong. You got to wire some
Speaker 2: money into account and the money is government money. It's
Speaker 2: euros or dollars or it's yen. It starts that way.
Speaker 2: And so people wanted to wire their money onto FTX.
Speaker 2: FTIX didn't have any bank accounts because banks didn't want
Speaker 2: to bank crypto exchanges, but they would bank Sam's original
Speaker 2: trading business. And so in the beginning, you would wire
Speaker 2: your money to Alameda in order to get it to FTX,
Speaker 2: And I mean that was already bulky, Like that's weird,
Speaker 2: and it's amazing that people did eight point eight billion
Speaker 2: dollars turn up that way and nobody asked any questions.
Speaker 2: And I've seen them, like the statements says you think
Speaker 2: you're wiring at f TX, but it actually says Alameda
Speaker 2: on it or some other Alameda subsidiary. But what should
Speaker 2: have happened is once FTX got bank accounts or once
Speaker 2: it got turned into crypto, that it be held in
Speaker 2: either crypto wallets or in FTX bank accounts and be
Speaker 2: completely separate From's trading fund. And it never was. So
Speaker 2: that's that's not the only way the customer's money ended
Speaker 2: up in Alameda, but it's the main way. And one
Speaker 2: can speculate about how and why it didn't ever get
Speaker 2: moved over like that that chunk of money. You know,
Speaker 2: I have my theories, but they're unfounded and Sam's story
Speaker 2: is that by the time they got a bank accounts
Speaker 2: for FTX, the kind of pool of money that had
Speaker 2: piled up inside of Alameda was such a small fraction
Speaker 2: of what was in Alameda, eight out of one hundred,
Speaker 2: So you know that it was just sort of like
Speaker 2: he wasn't even thinking about it. That's his story. The
Speaker 2: other thing is Sam is different, and so he's capable
Speaker 2: of thinking things that I wouldn't think. And he was
Speaker 2: capable of a radical sloppiness with money that I just
Speaker 2: wouldn't be capable of. But if it were me and
Speaker 2: I was thinking I have sinister intent or I just
Speaker 2: don't care about my customer, I would think, well, they'll
Speaker 2: never know. And it's a free loan, because that's how
Speaker 2: it functioned, right, It's like the customer's money is in
Speaker 2: the private hedge fund and no one's paying interest on it.
Speaker 2: It's a free loan. And that's how it looks to
Speaker 2: most people.
Speaker 1: When it all falls apart, how much money just vanished
Speaker 1: into thin air.
Speaker 2: This is a great question. When the customers all come
Speaker 2: from their money.
Speaker 1: At once, there's a run on the plan.
Speaker 2: There's a run on the on Sam's world, it's there's
Speaker 2: about fifteen billion dollars that should have been there. When
Speaker 2: they stop paying people back, there's about ten billion dollars
Speaker 2: that's still missing. So five billion dollars got paid back,
Speaker 2: and then so there's customers are out ten What we
Speaker 2: now know is it was actually so the bankruptcy people
Speaker 2: have announced these numbers. There's now eight point six billion
Speaker 2: dollars of customers deposits, like customers are waiting to get
Speaker 2: their eight point six billion dollars back. But against that,
Speaker 2: the bankruptcy people have already found seven point three billion
Speaker 2: dollars in liquid assets. So the whole right there is
Speaker 2: one point three billion that looks like this went poof. However,
Speaker 2: in addition, in Sam's world, there were all these investments
Speaker 2: made that are not liquid assets. They are investments in
Speaker 2: weird companies, startup companies, and at least one of those
Speaker 2: investments is clearly worth more than a billion dollars one
Speaker 2: out of a pile of three hundred. It's an investment
Speaker 2: in an artificial intelligence company called Anthropic. So it is
Speaker 2: conceivable that nothing went poof. It's conceivable that the customers
Speaker 2: will all get one hundred cents on the dollar bag,
Speaker 2: and that what they will have suffered was the inconvenience
Speaker 2: of waiting for it. And it may be years, maybe
Speaker 2: two or three years.
Speaker 1: I'm going to say conceivable, but likely.
Speaker 2: I mean, so it seems possibly, very possible, very possible
Speaker 2: that people will all get their money bag, which would
Speaker 2: be very Sam Bankman freed. It's sort of like this
Speaker 2: huge mess, this huge drama, this huge like you know,
Speaker 2: social convulsion, and in the end it's a shaggy dog story.
Speaker 1: While he could spend the rest of his life in
Speaker 1: Christy good, right, I mean, whether people get their money
Speaker 1: back or not, right, Michael, So what is what the
Speaker 1: charges is he facing?
Speaker 2: This is what I've been told by a former prosecutor
Speaker 2: who who now is a defense attorney, but she worked
Speaker 2: in this office. Is prosecuting him that I'm told oddly
Speaker 2: that there are no federal statutes about theft. You can't
Speaker 2: just charge him with stealing people's money. The laws that
Speaker 2: do exist are by using the federal mails, using the
Speaker 2: internet to facilitate a theft. So he's charged with wire fraud,
Speaker 2: with money laundering, with bank fraud. He's not charged with theft,
Speaker 2: which is what really is the problem is here. So
Speaker 2: they are complicated charges. There's seven of them. I think
Speaker 2: they tried to throw in some more but they were
Speaker 2: not able to do it. And when you add up
Speaker 2: all the charges and the kind of sentences that attach
Speaker 2: to those charges, he facing one hundred and twenty years
Speaker 2: in jail. But then so first the jury will decide
Speaker 2: convictor or quit. If they e quit, he's off. But
Speaker 2: if he convict, the judge decides the sentence, and the
Speaker 2: judge can do anything from just let him go, I
Speaker 2: mean like a day of house arrest or something to
Speaker 2: one hundred and twenty years in jail. And I suspect
Speaker 2: this judge who has become so irritated with Sam he
Speaker 2: can't even look at him. Sam, you know, under house
Speaker 2: arrest has not been the best behaved defendant, that the
Speaker 2: sentence was going to be heavy. So I don't know.
Speaker 2: I think he's very likely going to go to jail.
Speaker 2: It's possible, you never know what a jury's going to
Speaker 2: do that he won't, but he's very likely to go
Speaker 2: to jail. And what happens to him then, I don't know.
Speaker 2: He's I really I said this on sixty Minutes and
Speaker 2: it was a joke kind of, But think.
Speaker 1: Yeah, but I heard you said he'd be happier in
Speaker 1: prison with the Internet than in a beautiful with penthouse
Speaker 1: with no WiFi without exactly.
Speaker 2: And he apparently saw the Sixty Minutes Show in jail,
Speaker 2: and he apparently told as lure as that's true.
Speaker 1: You know, he was surrounded by a lot of it people.
Speaker 1: Nothing says I want to be your friend like someone
Speaker 1: with a lot of money, right. I mean, you talked
Speaker 1: about Anna Wintour doing a zoom. He got Tom Brady
Speaker 1: to you know, to promote FTX, Steph Curry, Shaquille O'Neill,
Speaker 1: Larry David got paid ten million dollars to do that
Speaker 1: Super Bowl commercial. They spent what twenty five million dollars
Speaker 1: on that commercial? Line yead, Yeah, it was, it was
Speaker 1: it was. Yeah, it was a funny ad. Anything Larry
Speaker 1: David does is funny to me. But do they have
Speaker 1: any culpability? You know, they're they're promoting this unregulated platform,
Speaker 1: They're they're vouching in essence for this kid and what
Speaker 1: he's created, and a lot of people admire them and
Speaker 1: listen to them and then invested in crypto. I mean,
Speaker 1: I'm just curious, what do you think I don't think
Speaker 1: they will, but I wonder if they should.
Speaker 2: Everybody was so all in on Sam bankmanfree it would
Speaker 2: have been unusual for someone and not take the money.
Speaker 2: And it wasn't just that's when you need Warren Buffett, right, Yes,
Speaker 2: that's right, And it wasn't. This is going to sound odd.
Speaker 2: It wasn't just the money. I mean, many of these
Speaker 2: people could get their money from a lot of different places.
Speaker 2: It's a bit more money than they might have gotten
Speaker 2: from other places. But they really liked him. They really
Speaker 2: liked him.
Speaker 1: Now can you understand that? Yes, after spending all that
Speaker 1: time with him.
Speaker 2: Because he's so different from anything anyone they knew, and
Speaker 2: he didn't behave the way people behave around celebrity.
Speaker 1: It's such a one way relationship. Like do you think
Speaker 1: he ever asked Tom Brady a question?
Speaker 2: No, people wanted to hear what he had to say.
Speaker 2: He was the new thing. He was a new thing.
Speaker 2: And it wasn't that this money was falling off him.
Speaker 2: That was part of it, but it wasn't just that,
Speaker 2: And it was like.
Speaker 1: It was also that he understood this world that nobody
Speaker 1: else did in a way.
Speaker 2: That's true, that he was explaining crypto. But take what
Speaker 2: the other thing was. He is a response if you
Speaker 2: look at the rise of Sam Beckmerfried and what are
Speaker 2: the ingredients The decline line of institutional authority in the world,
Speaker 2: the decline of government's ability to do anything about anything.
Speaker 2: People are so sick of it, like why can't we
Speaker 2: address climate change? Why can't these problems be? And people
Speaker 2: are defaulting to looking to people. And he seemed actually
Speaker 2: sincere in his desire to fix these problems, and people
Speaker 2: wanted him to exist. People wanted there to be a Sam.
Speaker 2: And you saw that it was palpable. It was not
Speaker 2: just greed. It was more than that. It was complicated.
Speaker 1: When we come back, I'm going to finish things up
Speaker 1: by talking with Michael about a personal tragedy is family experienced.
Speaker 1: That's right after this, we're back with more of my
Speaker 1: conversation with Michael Lewis. We only have five minutes. Can
Speaker 1: I ask you just some general questions about your career, Michael.
Speaker 1: One of your former subjects Billy Bean, of course from Moneyball.
Speaker 1: He once said, you have a horsesh This is a
Speaker 1: funny quote, A horseshoe in your underwear when it comes
Speaker 1: to finding a good story. I mean, you do seem
Speaker 1: to really be able to.
Speaker 2: I'm sorry, Katie, that's not a horseshoe.
Speaker 1: Okay, how do you find these good stories? Michael?
Speaker 2: I just wonder. It's not that there's no science to it.
Speaker 2: I just wonder. I mean, Sam mcmurfree collides with me, right.
Speaker 2: But here's what helps, not thinking you know what the
Speaker 2: story is, not prejudging, not trying to impose order too
Speaker 2: early on what you're saying. Just feeling like this is
Speaker 2: interesting and I want more.
Speaker 1: Of it and I want to see what happens, and
Speaker 1: having the luxury, to be honest with you, to spend
Speaker 1: two years.
Speaker 2: But then there's a risk. I mean I got to
Speaker 2: November of last year and I wasn't sure I had
Speaker 2: a book. I was having arguments with friends about whether this.
Speaker 2: They were arguing with me, like you should do it,
Speaker 2: and I I'm not sure. I don't know where it's going.
Speaker 2: And that has happened to me that I get stuck
Speaker 2: in something for a while and it doesn't yield anything.
Speaker 2: But I've marinated it for a year and where did
Speaker 2: that year go? But that is it's just sort of like,
Speaker 2: if I'm interested, genuinely interested, not trying to like force
Speaker 2: some idea upon the world, and I let that interest
Speaker 2: just flow over me. It eventually leads somewhere good. And
Speaker 2: what's going on is if I'm interested, really interested, the
Speaker 2: reader will be interested. And if I'm not interested, the
Speaker 2: reader is going to be bored.
Speaker 1: But I think also you're able to marry personality with
Speaker 1: complicated topics with sort of social impact, and you're able
Speaker 1: to weave them all together in a way that's understandable
Speaker 1: and entertaining, and I think that's your gift. Michael. Meanwhile,
Speaker 1: congratulations for selling Going Infinite for five million clams to Apple.
Speaker 2: Do you believe the numbers you read in the newspaper?
Speaker 1: Is that not true?
Speaker 2: Well, it's never you know, they have to make the movie.
Speaker 2: There's incentives as that kind of stuff. But yeah, it's.
Speaker 1: Still it's a nice chunk of change. Michael.
Speaker 2: Uh. Yeah, I hope it makes my horseshoe look even bigger.
Speaker 1: I love talking to You're such a fun interview and
Speaker 1: you're heading out, but I just want to say one
Speaker 1: thing before you leave. I just want you to know
Speaker 1: that you and Tabitha and your family have been in
Speaker 1: my thoughts so much since you lost your daughter Dixie
Speaker 1: and her boyfriend in a car accident. I read that, Michael,
Speaker 1: and I was honestly it was from afar crushing.
Speaker 2: I know that you know what pain is.
Speaker 1: I do, but losing a child I think is indescribable
Speaker 1: and unparalleled pain. And you know, I know Tabitha a
Speaker 1: little bit from when she was on NBC and always
Speaker 1: really liked her. And I'm just so sorry for your loss,
Speaker 1: and I'm glad that you are moving forward because you know,
Speaker 1: I always think we're all terminal, like we just have
Speaker 1: to make the most of the time we have. And
Speaker 1: I just I just wanted you to know that you
Speaker 1: and your family, your two other kids, Quinn and Walker, right, yep,
Speaker 1: I've just been holding you all in my heart.
Speaker 2: Thank you. She sticks us alive in me. She's with me,
Speaker 2: So she's in this book in a funny way. So yeah,
Speaker 2: thank you.
Speaker 1: By the way, everybody, if you just can't get enough
Speaker 1: of Sam Bankman Freed, Michael is going to be doing
Speaker 1: a podcast called Judging Sam, chronicling the trial with the
Speaker 1: different guest every week, so check it out. Thanks for
Speaker 1: listening everyone. If you have a question for me, a
Speaker 1: subject you want us to cover, or you want to
Speaker 1: share your thoughts about how you navigate this crazy world
Speaker 1: reach out. You can leave a short message at six
Speaker 1: oh nine five one two by five oh five, or
Speaker 1: you can send me a DM on Instagram. I would
Speaker 1: love to hear from you. Next Question is a production
Speaker 1: of iHeartMedia and Katie Kurk Media. The executive producers are Me,
Speaker 1: Katie Couric, and Courtney Ltz. Our supervising producer is Marcy Thompson.
Speaker 1: Our producers are Adrianna Fazzio and Catherine Law. Our audio
Speaker 1: engineer is Matt Russell, who also composed our theme music.
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