WEBVTT - Interview With Michael Lewis: Masters in Business (Audio) 0:00:00.120 --> 0:00:03.199 Brought to you by Bank of America Merrill Lynch, committed 0:00:03.240 --> 0:00:06.280 to bringing higher finance to lower carbon named the most 0:00:06.320 --> 0:00:10.280 innovative investment bank for climate change and sustainability by the Banker. 0:00:10.640 --> 0:00:13.920 That's the power of Global Connections. Bank of America North 0:00:13.960 --> 0:00:19.560 America member f D I C. This is Masters in 0:00:19.640 --> 0:00:24.119 Business with Barry Ridholts on Bloomberg Radio. This week on 0:00:24.160 --> 0:00:27.480 the podcast, I have none other than Michael Lewis, and 0:00:27.560 --> 0:00:30.840 let me tell you I had a blast talking to him. 0:00:30.880 --> 0:00:35.520 He is just eloquent and charming and full of great stories. Uh. 0:00:35.560 --> 0:00:37.760 It was if you can imagine how much fun it 0:00:37.760 --> 0:00:40.360 would be to sit in a room and just chew 0:00:40.400 --> 0:00:43.599 the fat with Michael Lewis overall his books. Yes, it 0:00:43.680 --> 0:00:46.519 was that much fun. So rather than me give you 0:00:46.560 --> 0:00:49.080 a whole song and dance about his background, because you 0:00:49.159 --> 0:00:52.800 already know his background, you've already read most of his books, 0:00:53.200 --> 0:00:55.880 I'm just gonna shut up and with no further ado, 0:00:56.400 --> 0:01:03.000 my conversation with Michael Lewis. This is Masters in Business 0:01:03.240 --> 0:01:07.160 with Barry Ridholtz on Bloomberg Radio. My special guest this 0:01:07.200 --> 0:01:10.360 week is none other than Michael Lewis. He is the 0:01:10.400 --> 0:01:15.920 author of such best selling financial stories as Moneyball, the 0:01:16.040 --> 0:01:21.959 Big Short Flashboys UH. Most recently he wrote The Undoing Project, 0:01:22.240 --> 0:01:26.319 a story about UH, Danny Kahneman and Amos Tversky, the 0:01:26.400 --> 0:01:33.400 people who were essentially invented the field of behavioral economics. UM. 0:01:33.440 --> 0:01:36.479 I could talk about your resume forever, but let's jump 0:01:36.600 --> 0:01:40.200 right into this. Michael Lewis welcome to Bloomer. Pleasure to 0:01:40.240 --> 0:01:43.520 be back here. So let's let's jump right into a 0:01:43.560 --> 0:01:46.360 little bit about your background. So you you come out 0:01:46.400 --> 0:01:48.560 of the London School of Economics, you get a job 0:01:48.600 --> 0:01:53.240 at Solomon Brothers in the nine eighties, markets on fire, 0:01:53.280 --> 0:01:56.920 Sally's one of the hottest firms on the street, and 0:01:57.160 --> 0:01:59.840 you just walk away from that. What sort of pushed 0:01:59.840 --> 0:02:03.280 back did you get from your friends and family about yeah, 0:02:03.400 --> 0:02:05.320 making a ton of money, but this sort of stuff 0:02:05.400 --> 0:02:08.480 is not for me. It was a funny situation because 0:02:08.560 --> 0:02:11.600 through a lot of accident, I had had some success 0:02:11.600 --> 0:02:14.920 as Solomon Brothers. I got there and UM, I was 0:02:14.960 --> 0:02:17.880 taking under the wing of a big hedge fund manager 0:02:17.880 --> 0:02:20.000 in Europe, where where I was based. He did all 0:02:20.040 --> 0:02:21.760 his business through me, so I looked like a very 0:02:21.800 --> 0:02:25.320 profitable salesperson. I was. I was a derivatives person at 0:02:25.360 --> 0:02:27.680 Solomon Brothers. Really yeah, I was the I was the 0:02:27.760 --> 0:02:31.440 arm of John Merryweather's desk in London, and my job 0:02:31.520 --> 0:02:34.280 was explain options and futures to everybody because they were 0:02:34.320 --> 0:02:37.960 new and uh, and dream up new kinds of securities, 0:02:38.120 --> 0:02:40.720 which I did, and sell whatever I could sell to 0:02:40.760 --> 0:02:43.720 whoever I talked to. And uh. And that's the guy 0:02:43.720 --> 0:02:46.600 who eventually writes the big short. That's the guy eventually 0:02:46.639 --> 0:02:49.240 writes a BA shorn. You know it was? It was 0:02:49.560 --> 0:02:54.120 UM extremely useful that training in in in coming to 0:02:54.320 --> 0:02:57.320 grips with collateralized obligations and credit, the fault swaps and 0:02:57.360 --> 0:02:59.560 all the rest. But what ifs? So what happened was 0:02:59.639 --> 0:03:03.680 I UM, I knew going in that I wanted to 0:03:03.680 --> 0:03:05.680 write for a living. I had no idea if it 0:03:05.720 --> 0:03:08.880 was even possible. I was. I was writing magazine articles 0:03:08.960 --> 0:03:15.240 while I was at Solomon Brothers. Um the economists published 0:03:15.280 --> 0:03:17.440 the first I don't know, fifteen or twenty of them 0:03:17.919 --> 0:03:20.760 and with no byline. But then I'd I'd bundle up 0:03:20.760 --> 0:03:22.800 the clips and I'd send them off to editors and say, 0:03:22.840 --> 0:03:24.880 I actually wrote this. You can call this guy and check. 0:03:25.440 --> 0:03:27.920 And Michael Kinsley, who was the editor of The New Republic, 0:03:28.720 --> 0:03:32.480 and Amity Schlace, who was then the op ed editor 0:03:32.680 --> 0:03:36.040 of the Wall Street Journal Europe, encouraged me and and 0:03:36.320 --> 0:03:39.920 a magazine in England too, so I had several outlets. Uh, 0:03:39.960 --> 0:03:42.320 and the stuff started getting attention. The stuff with my 0:03:42.360 --> 0:03:45.720 byline got me in trouble. I mean I wrote a work. Well, yeah, 0:03:45.760 --> 0:03:47.880 I wrote a piece for the Wall Street Journal that 0:03:48.080 --> 0:03:50.280 ended up being reprinted in the U. S Journal on 0:03:50.280 --> 0:03:53.160 the op ed page. That's that argued that investment bankers 0:03:53.160 --> 0:03:55.760 were overpaid and at the bottom it it's at the bottom, 0:03:55.760 --> 0:03:59.120 it said. Michael Lewis is an associated Solomon Brothers in London. 0:03:59.440 --> 0:04:02.480 And when I came in the next day, Uh, the 0:04:02.520 --> 0:04:05.280 guy who ran Solomon belle As Europe was ashen face 0:04:05.320 --> 0:04:07.920 sitting at my desk and he and he said, I've 0:04:07.960 --> 0:04:10.040 been on the phone all night with members of the boards, 0:04:10.280 --> 0:04:13.000 board of directors that this is the things being reprinted 0:04:13.000 --> 0:04:16.960 across the country and and we can't have he was pleading. 0:04:16.960 --> 0:04:18.919 It was it was more in sorrow than an anger. 0:04:19.000 --> 0:04:21.760 It was you can't go in the Wall Street Journal 0:04:22.040 --> 0:04:24.880 and say you're with us and that we're overpaid. And 0:04:24.920 --> 0:04:28.279 I said, and I said, well, it's true, and he 0:04:28.320 --> 0:04:30.760 said it is true, but you know, you know but 0:04:31.240 --> 0:04:33.680 and then he said, he said, is there And he said, 0:04:33.720 --> 0:04:35.599 could you just you gotta stop writing? And I said, 0:04:35.560 --> 0:04:39.039 I I'm not gonna do that. And he said he 0:04:39.120 --> 0:04:42.080 was great. Actually was Charlie mcphaz's name. He was wonderful guy. 0:04:42.160 --> 0:04:45.960 And he says, well, is there anyway, um you could 0:04:45.960 --> 0:04:49.000 do it um under a different name so that nobody 0:04:49.000 --> 0:04:51.640 connects it back to us? And I said fine, And 0:04:51.680 --> 0:04:53.839 I wrote under the name Diana Bleaker, which was my 0:04:53.920 --> 0:04:59.320 mother's name, and my my definished the story. I STI, 0:05:00.000 --> 0:05:03.080 I'm writing under Diana Blinker. And Diana Bleaker publishes something 0:05:03.080 --> 0:05:04.719 in the New Republic. And I get a call from 0:05:05.120 --> 0:05:08.080 Chevy Chase's dad, who's an editor at Simon and Schuster, 0:05:08.120 --> 0:05:10.479 and he says, I figured out you're Diana Bleaker, uh, 0:05:10.640 --> 0:05:12.520 and you should write a book. And I thought, oh 0:05:12.520 --> 0:05:14.760 my god, someone will We'll pay me to write a book. 0:05:14.760 --> 0:05:18.200 And it wasn't much, but that at that moment, I 0:05:18.200 --> 0:05:20.560 went and I said to the my bosses, I'm out 0:05:20.600 --> 0:05:21.960 of here. I'm gonna'm gonna be gonna be a writer. 0:05:22.000 --> 0:05:24.320 And they thought I was insane. That didn't answer your question. 0:05:24.480 --> 0:05:26.080 They actually tried to talk me off the ledge And 0:05:26.160 --> 0:05:29.479 it was not really it was not, oh, you can't 0:05:29.480 --> 0:05:31.440 go write a book about Solomon Brothers. Nobody we even 0:05:31.440 --> 0:05:34.599 thought about that or even cared. It was more we 0:05:34.680 --> 0:05:37.280 need you here and I'm we're really worried about your 0:05:37.279 --> 0:05:39.680 mental health. You're not gonna I mean, you're not gonna 0:05:39.680 --> 0:05:41.760 be a writer. It was that kind of they were 0:05:41.800 --> 0:05:43.960 trying to help me. Uh So we had kind of 0:05:43.960 --> 0:05:46.320 these amount of to a therapy session with the guys 0:05:46.360 --> 0:05:48.880 who ran the European office. So you're just yuessing them. 0:05:49.160 --> 0:05:53.320 But I recall reading that you kept a diary most 0:05:53.360 --> 0:05:55.039 of the time. Was it's the whole four years you 0:05:55.120 --> 0:05:57.159 had Solomon Brothers. So I wasn't there four years. I 0:05:57.200 --> 0:06:01.239 was there just shy a three And uh it wasn't 0:06:01.279 --> 0:06:03.440 a diary in the way that I don't know you 0:06:03.520 --> 0:06:08.960 might imagine Jane Austin, because I was writing about it. 0:06:09.279 --> 0:06:13.239 I mean, so yeah, I started taking an interest in 0:06:13.279 --> 0:06:17.920 the what was specifically going on around me, uh as 0:06:18.000 --> 0:06:21.359 possible literary material maybe six months before I left, So 0:06:21.400 --> 0:06:23.920 not the whole time. What I did is I mean, 0:06:24.000 --> 0:06:27.640 during the training program, I wrote down everything, and so 0:06:27.680 --> 0:06:30.680 I had all that on all that stuff. Um, I 0:06:30.760 --> 0:06:34.400 actually the firm. I mean it would just it would. 0:06:34.839 --> 0:06:37.279 Public relations people of Wall Street firms today would not 0:06:37.360 --> 0:06:40.200 believe how loose it was. When I left, I called 0:06:40.279 --> 0:06:42.359 and said, I get some videotapes from the training program, 0:06:42.400 --> 0:06:44.800 just so I get the dialogue right. And then they 0:06:44.839 --> 0:06:48.600 were friends. When got me a couple of videos I needed, 0:06:49.000 --> 0:06:53.000 and uh, and people Louis Ronieri, who ran the mortgage 0:06:54.640 --> 0:06:58.760 right exactly helped me, uh, you know, kind of come 0:06:58.800 --> 0:07:01.799 to come to term with what had happened in his department. 0:07:01.880 --> 0:07:04.279 I went and interviewed all the mortgage traders. Everybody's just 0:07:04.760 --> 0:07:07.120 nobody said you can't write a we can't write a 0:07:07.120 --> 0:07:09.480 book about us, you know, nobody said you know, it 0:07:09.600 --> 0:07:13.000 was no there was no free sty of scandal around it. 0:07:13.000 --> 0:07:14.760 It was just like, it's kind of cool, you're gonna 0:07:14.760 --> 0:07:16.280 write a book. But I'm a good luck guy with 0:07:16.320 --> 0:07:18.640 that right Who wants who cares about a book that? 0:07:19.640 --> 0:07:22.840 Everybody couldn't be sweeter about it? So you leave an 0:07:22.920 --> 0:07:25.000 eight eight right now? I got to let me make 0:07:25.000 --> 0:07:27.000 sure I got the dates right and the book comes 0:07:27.000 --> 0:07:29.520 out in eighty nine. No, I left what I do. 0:07:29.640 --> 0:07:32.160 That's right. I left in. I waited the boy, but 0:07:32.280 --> 0:07:37.840 I actually I waited enough for me. I waited till 0:07:37.920 --> 0:07:40.360 the bonus hit the bank account in the end of 0:07:40.440 --> 0:07:44.720 January early February and left. I wrote the book in 0:07:44.760 --> 0:07:47.000 a year, and so the book was done by early 0:07:47.040 --> 0:07:48.920 eighty nine. It came at the end of eighty nine. Wow, 0:07:48.960 --> 0:07:52.280 that's amazing. I'm Barry rid Hults. You're listening to Masters 0:07:52.320 --> 0:07:55.600 in Business on Bloomberg Radio. My special guest today is 0:07:55.640 --> 0:07:58.559 one of my favorite authors. His name is Michael Lewis, 0:07:58.600 --> 0:08:01.640 and you're probably familiar with him from books such as 0:08:01.800 --> 0:08:06.400 Liars Poker, The Big Short, Moneyball, and more recently The 0:08:06.480 --> 0:08:11.600 Undoing Project, A Story of two uh is reely psychologist 0:08:11.680 --> 0:08:15.640 who very much change the way we look at cognition 0:08:15.680 --> 0:08:20.560 and thinking. A friendship that changed our minds. So let's 0:08:20.600 --> 0:08:22.480 let's jump right into this, because first of all, I 0:08:22.520 --> 0:08:25.640 really enjoyed the book. I found it fascinating. We've had 0:08:25.960 --> 0:08:29.600 Failor and Conomon and other behaviorists on the show, and 0:08:29.640 --> 0:08:33.800 I love that sort of approach to thinking about thinking. 0:08:34.800 --> 0:08:39.000 And what I really liked was your introduction in the book. 0:08:39.160 --> 0:08:43.480 You explain how Failor and Cass Sunstein wrote a review 0:08:43.520 --> 0:08:46.800 of money Ball published in the New Republic, and they 0:08:46.920 --> 0:08:49.240 kind of call you out for saying, Hey, this is 0:08:49.280 --> 0:08:52.800 really all about cognition, and how did you ignore the 0:08:52.800 --> 0:08:56.000 works of the people who created the science and most 0:08:56.000 --> 0:08:59.320 of Versking and Danny Knoman. So the question is, was 0:08:59.360 --> 0:09:01.400 this book a little bit of a mia kulpa for 0:09:01.440 --> 0:09:06.000 that oversight in in money Ball? You know, it wasn't 0:09:06.040 --> 0:09:09.360 And I wasn't really feeling guilty about it. I felt 0:09:09.440 --> 0:09:15.200 I felt um, I felt Uh. I was surprised that 0:09:15.320 --> 0:09:20.640 there there had been working psychology that that explained what 0:09:20.720 --> 0:09:22.679 was going on in the minds of baseball scouts when 0:09:22.679 --> 0:09:26.440 they missed judge baseball players and among other things. I 0:09:26.520 --> 0:09:28.920 was surprised I'd never heard of these guys, because I 0:09:28.960 --> 0:09:31.160 did do a master's in economics. But it was before 0:09:31.280 --> 0:09:34.040 that all has happened, you know, And when when did 0:09:34.040 --> 0:09:38.040 you When I got out of the the LC and 0:09:38.080 --> 0:09:40.240 so nobody talked about this kind of stuff. You were 0:09:40.280 --> 0:09:45.640 being taught rational expectation, it was just starting to and um, 0:09:45.679 --> 0:09:49.199 and then uh, what happens is that I was out 0:09:49.240 --> 0:09:51.760 drinking with a friend. Uh, I got named dak Or 0:09:51.840 --> 0:09:55.560 Keltner who was a psychologist of the Berkeley uh in 0:09:55.600 --> 0:09:58.720 the Berkeley at cal and he's he's like a wonderful 0:09:58.760 --> 0:10:01.720 guy and it and I told him, I said, you know, 0:10:01.880 --> 0:10:05.120 it's odd that your field somehow has something to say 0:10:05.160 --> 0:10:07.480 about this book I wrote. And he said, Danny lives 0:10:07.520 --> 0:10:09.360 just up the hill. You can go. You can go 0:10:09.400 --> 0:10:12.400 see him. And he's a friend. I said, really. And 0:10:12.440 --> 0:10:14.520 it took me. I took me sometime to take him 0:10:14.559 --> 0:10:16.840 up on that offer. But he introduced me to Danny 0:10:17.000 --> 0:10:19.440 and when who By the way, he had won the 0:10:19.440 --> 0:10:22.400 Nobel Prize for his work the year before money Bull comes. 0:10:22.440 --> 0:10:25.840 That's right, that's right in economics and act. That was weird. 0:10:25.880 --> 0:10:28.640 You nobody said, how is the psychologist winning the Nobel 0:10:28.679 --> 0:10:32.400 Prize in economics? This nobody? Nobody. You look at the 0:10:32.480 --> 0:10:35.640 descriptions of his Nobel Prize and it says, oh, this 0:10:35.760 --> 0:10:39.719 is normal. It's bizarre. Uh. Well, the underlying premise for 0:10:39.800 --> 0:10:43.800 all of economics is that humans are are rational, optimized, 0:10:44.320 --> 0:10:46.960 nothing of the sort. I'm not saying it's not deserved. 0:10:46.960 --> 0:10:48.840 I'm saying that if you told him when he was 0:10:48.880 --> 0:10:50.760 doing his work that he's gonna win a Nobel Prize 0:10:50.760 --> 0:10:53.120 in economics. He looked at you like you had three heads. 0:10:53.160 --> 0:10:56.320 But uh, what happened? Really it was organic. It's kind 0:10:56.320 --> 0:10:57.400 of curious. I want to meet a guy who win 0:10:57.440 --> 0:10:59.720 the Nobel Prize. That was probably the first thought, was 0:10:59.760 --> 0:11:02.400 I to go meet somebody who won a Nobel Prize. 0:11:02.480 --> 0:11:03.920 And I didn't go up thinking I'm gonna write a 0:11:03.920 --> 0:11:07.600 book about him, and I gotten. We just became friends. 0:11:07.640 --> 0:11:09.440 I started following him. I started I'd see him when 0:11:09.440 --> 0:11:12.040 he was in town. We go on along walks, uh 0:11:12.080 --> 0:11:14.920 in the hills, and he would talk about his relationship 0:11:14.920 --> 0:11:17.800 with Amos. And that's what interested me that I thought 0:11:18.040 --> 0:11:20.320 these guys had this incredible love affair. I mean, it 0:11:20.360 --> 0:11:22.800 wasn't there was no sex. The sex was having the ideas, 0:11:23.640 --> 0:11:27.479 but it was there was a drama to their relationship 0:11:27.600 --> 0:11:30.960 that got me interested. I called it an intellectual romance 0:11:31.320 --> 0:11:35.200 in the review you haven't read, um, But since you 0:11:35.240 --> 0:11:38.400 mentioned Amos, let's let's talk a little bit about him, 0:11:38.480 --> 0:11:44.120 because there's this really bizarre thing you mentioned in the afterward. So, 0:11:44.280 --> 0:11:46.920 and I'm not giving away the ending to any of this. So, 0:11:47.160 --> 0:11:50.560 both Kneman and Tversky talked about the role of luck 0:11:50.640 --> 0:11:55.520 in people's lives, coincidentally, when you start thinking about doing 0:11:55.559 --> 0:12:02.880 this book you had previously taught or coached Amos Tversky's son. Well, 0:12:02.880 --> 0:12:07.080 this gets weird, right, I mean, that's really well. When 0:12:07.440 --> 0:12:09.800 at some point I can't remember when the penny dropped, 0:12:09.840 --> 0:12:12.480 I realized I had a kid in the year I 0:12:12.559 --> 0:12:17.720 taught writing a cow whose last name was Tversky, and 0:12:18.160 --> 0:12:21.480 he was about my favorite student, and we had a friendship. 0:12:21.520 --> 0:12:23.720 I'd see him every year for dinner, and he never 0:12:23.800 --> 0:12:27.600 mentioned anything about his dad. I wouldn't even known who 0:12:27.600 --> 0:12:30.439 he was anyway, so there would be no reason. Uh. 0:12:31.440 --> 0:12:34.679 But then I wrote I remember writing or in Diversky notes, saying, 0:12:34.920 --> 0:12:37.440 is Amos your dad? And he said yeah, yeah, And 0:12:37.480 --> 0:12:39.680 I said, well, I'm toying with the idea of writing 0:12:39.679 --> 0:12:42.000 a book about his collaboration with Danny. And he goes, 0:12:42.040 --> 0:12:45.240 oh really. It was kind of like he said, my mom, 0:12:45.240 --> 0:12:47.000 I'm sure my mom will be happy to help. It 0:12:47.000 --> 0:12:50.439 was basically what he said, but but it was it 0:12:50.520 --> 0:12:54.199 was serendipitous, to say the least. So you you teach 0:12:54.280 --> 0:12:59.400 Amos Tversky's son, Danny Conuman lives up the street from you. 0:12:59.400 --> 0:13:04.120 You spend five years softening up Kneman in order to 0:13:04.200 --> 0:13:06.520 do the book that he was really reluctant. There were 0:13:06.520 --> 0:13:11.080 two stages of this assault. The first was um getting 0:13:11.320 --> 0:13:18.600 helping him a little bit, uh right, because his publisher's 0:13:18.640 --> 0:13:20.679 agent thought it was insane for him to be talking 0:13:20.679 --> 0:13:22.960 to me about a book before he wrote his, and 0:13:23.240 --> 0:13:25.480 you're going to steal the idea? Yeah, yeah, I wouldn't. 0:13:25.520 --> 0:13:27.400 It was so different, it didn't matter to me. But 0:13:27.440 --> 0:13:29.080 he said, we could you just wait until I'm done 0:13:29.080 --> 0:13:31.880 with this and so so that that was the first. 0:13:31.920 --> 0:13:33.920 So there was not even possibility of doing the thing 0:13:34.000 --> 0:13:36.920 until after he was done with that. And then he 0:13:37.040 --> 0:13:39.360 never really ever said no, you're not going to write 0:13:39.360 --> 0:13:44.360 a book about us, But he expressed extreme skepticism and 0:13:44.840 --> 0:13:49.680 uh and and concern whenever I'd kind of bring it up, 0:13:49.720 --> 0:13:52.440 and he was UM. I wanted him to want to 0:13:52.480 --> 0:13:55.319 do it, and I never got him there. I never 0:13:55.320 --> 0:13:58.199 got him there at best. And so but I got 0:13:58.240 --> 0:13:59.959 him to the point where he would answer my question 0:14:00.760 --> 0:14:05.480 and uh, and he was um. He was wonderful about 0:14:05.520 --> 0:14:07.480 it in the end, But it did. Yes, if I 0:14:07.480 --> 0:14:09.320 would say five years, I went and saw him an 0:14:09.320 --> 0:14:12.920 O seven. It was about two thousand twelve when it 0:14:13.000 --> 0:14:15.679 became very earnest. So here's where I'm going to call 0:14:15.760 --> 0:14:18.040 you out for a little bs in the book. And 0:14:18.080 --> 0:14:21.400 you write, you know, the book didn't require a writer 0:14:21.520 --> 0:14:24.920 as much as a stenographer, And based on everything we've 0:14:24.960 --> 0:14:29.400 just said, that line is pure nonsense because it's clear 0:14:29.520 --> 0:14:32.680 from everything you just said, and I'm not blowing smoke, 0:14:33.320 --> 0:14:36.840 nobody else could have done this book except you because 0:14:36.880 --> 0:14:41.280 of your relationship with Orange Diversity and your friendship with Danny. 0:14:41.360 --> 0:14:44.080 Who else could have put these pieces together the way 0:14:44.120 --> 0:14:47.760 you did. Well. When I said that it required a stenographer, 0:14:47.840 --> 0:14:50.720 what I meant was the people I was interviewing, these 0:14:51.280 --> 0:14:55.560 these seventy five year old, eighty year old Israeli people, intellectuals. 0:14:56.160 --> 0:14:59.520 What was coming out of their mouths was it was 0:14:59.560 --> 0:15:00.960 all I want to do it. I didn't. I don't 0:15:01.000 --> 0:15:04.320 use a tape recorder. Every one of them had a 0:15:04.440 --> 0:15:08.040 chilling war story, women and men. Everything was everybody had 0:15:08.080 --> 0:15:11.600 almost died many times in the most dramatic ways, and 0:15:11.800 --> 0:15:15.240 all of them had exquisite ideas and observations about my 0:15:15.280 --> 0:15:17.800 main characters. So what I meant was they did a 0:15:17.840 --> 0:15:20.280 lot of the work for me, and that work normally 0:15:20.320 --> 0:15:23.320 I would have to do insight into the characters. It 0:15:23.440 --> 0:15:28.120 had been done for me and by by intellectual bulldozers. However, 0:15:28.240 --> 0:15:30.800 your point is well taken that I was positioned to 0:15:30.840 --> 0:15:35.000 do it, and when I finally I some The last 0:15:35.040 --> 0:15:36.640 little hurdle I had to get over was in my 0:15:36.680 --> 0:15:38.960 own mind. I was afraid of the material because I 0:15:39.000 --> 0:15:41.360 didn't know I well, I didn't know anyth about psychology. 0:15:41.400 --> 0:15:43.520 I didn't know much about Israel. I was walking into 0:15:43.520 --> 0:15:46.920 a really new territory for me, and I thought, I 0:15:47.000 --> 0:15:50.320 kept thinking, who who should write this book? And maybe 0:15:50.360 --> 0:15:52.440 Malcolm got Gladwall should write this book. You'd do a 0:15:52.480 --> 0:15:57.920 great job. He's got uh, he's really facile with complicated ideas. 0:15:58.280 --> 0:16:01.000 He's he'd be perfect for it. Didn't see it didn't 0:16:01.000 --> 0:16:04.280 seem like my book. And then I realized that it's 0:16:04.320 --> 0:16:05.680 got to be my book, because the only way you 0:16:05.680 --> 0:16:08.320 tell the stories if you're inside these people, and no 0:16:08.360 --> 0:16:10.480 one else is going to get inside these people. Brought 0:16:10.520 --> 0:16:13.320 to you by Bank of America Merrill Lynch. Seeing what 0:16:13.440 --> 0:16:17.080 others have seen, but uncovering what others may not. Global 0:16:17.120 --> 0:16:20.760 Research that helps you Harness disruption voted top global research 0:16:20.800 --> 0:16:25.000 firm five years running. Merrill Lynch Pierce, Fenner and Smith Incorporated. 0:16:25.680 --> 0:16:28.840 I'm Barry Hults. You're listening to Masters in Business on 0:16:28.880 --> 0:16:32.960 Bloomberg Radio. My special guest today is Michael Lewis. He 0:16:33.120 --> 0:16:36.880 is the Poet Laureate of Financial nonfiction UH and Wall 0:16:36.920 --> 0:16:40.760 Street related narratives. Uh. Let's jump right into some of 0:16:40.800 --> 0:16:44.280 the really interesting books you've written in the past and 0:16:44.280 --> 0:16:47.080 and some of the responses to them. Um. I was 0:16:47.120 --> 0:16:51.160 watching UH sixty minutes when you were talking about Flashboys, 0:16:51.240 --> 0:16:54.240 and you came out and said the markets were rigged 0:16:54.720 --> 0:16:57.920 and all hell breaks loose? What what was the pushback 0:16:57.960 --> 0:17:00.680 like to that? Wait? Was funny because it didn't even 0:17:00.680 --> 0:17:02.600 occur to me I was saying anything controversial. I thought 0:17:02.600 --> 0:17:05.480 everybody knew it. The writ and they pretty much always 0:17:05.480 --> 0:17:07.760 be read and but the way they it was just 0:17:07.880 --> 0:17:10.960 the way they're rigged has changed. And uh, really it's 0:17:11.040 --> 0:17:14.160 it's so if you sit with the people who at 0:17:14.160 --> 0:17:17.159 I X, the the exchange I was writing about, and 0:17:17.200 --> 0:17:19.720 have them show you in real time kind of what's 0:17:19.720 --> 0:17:22.840 going on in the market, you say, well, that's rigged. Uh. 0:17:23.119 --> 0:17:25.159 So I didn't think it was a kind of surprised 0:17:25.160 --> 0:17:28.320 that it generated the response it did. But the blowback. 0:17:29.040 --> 0:17:33.720 It's the book that was the most unpleasant to publish. Really, Yes, 0:17:34.160 --> 0:17:36.800 in that, by the way, fascinating book. I love the 0:17:36.840 --> 0:17:40.040 opening about the line of sight with running the fiber 0:17:40.080 --> 0:17:43.640 optic cables and and how milliseconds make a difference. So 0:17:43.800 --> 0:17:47.400 the the it was the most unpleasant to publish because 0:17:47.400 --> 0:17:50.280 it made so many people so angry, who were angry, 0:17:50.280 --> 0:17:52.840 who who were going to try to do something about it, 0:17:53.080 --> 0:17:54.960 And the reason was It took me about a moment 0:17:55.000 --> 0:17:57.000 to realize that what the reason was. It's the first 0:17:57.040 --> 0:17:59.119 time and the only time I've written a book that 0:17:59.160 --> 0:18:01.119 was going to take money away from Wall Street people 0:18:01.640 --> 0:18:05.840 that that that it was. It was it came as news, uh, 0:18:05.920 --> 0:18:08.120 to some extent the story I told the guys who 0:18:08.119 --> 0:18:11.119 were my main characters had news in their hands that 0:18:11.119 --> 0:18:15.000 they didn't hadn't given anybody else. And unlike the big 0:18:15.040 --> 0:18:19.359 short liars poker um, the money hadn't all been made. 0:18:19.880 --> 0:18:22.600 I wasn't I wasn't writing something retrospectively. I was writing 0:18:22.640 --> 0:18:24.880 something that was going on that if it was shut down, 0:18:24.920 --> 0:18:27.800 would cost people billions of dollars and it and all 0:18:27.840 --> 0:18:30.560 of a sudden, people are furious. They're hiring lobbyists to 0:18:30.560 --> 0:18:33.600 go to Washington and spread stuff on the internet, and 0:18:33.840 --> 0:18:35.320 it was like being on the receiving end of a 0:18:35.320 --> 0:18:40.000 political campaign. Very it was. It was a crude and 0:18:40.160 --> 0:18:42.480 kind of if you knew anything about the subject, and 0:18:42.760 --> 0:18:46.520 kind of intellectually embarrassing one. But nevertheless it was it 0:18:46.560 --> 0:18:49.080 was just weird have people so hostile. So you you 0:18:49.119 --> 0:18:51.480 go on TV, you get into a debate with the 0:18:51.520 --> 0:18:54.639 CEO of the Bats exchange. He says a bunch of 0:18:54.680 --> 0:18:57.840 things that turned out to be not so true. Ultimately 0:18:58.359 --> 0:19:03.080 he steps down from the vision. I said, you essentially 0:19:03.560 --> 0:19:06.880 are to blame for him getting fired. What other crazy 0:19:06.920 --> 0:19:10.280 sort of stuff came out of that book? We know. 0:19:11.040 --> 0:19:14.240 Brad Katayama was a guest on the show and was 0:19:14.359 --> 0:19:17.280 quite delightful. The main character of the book was on 0:19:17.320 --> 0:19:20.960 that CNBC show with me, and he's the reason the 0:19:21.000 --> 0:19:23.120 guy from Bat Bats he called him out. He called 0:19:23.160 --> 0:19:24.800 him out, and he had he had ability to call 0:19:24.840 --> 0:19:26.760 h out in a way I did not, because once 0:19:26.800 --> 0:19:29.800 you get into the weeds of the subject that unless 0:19:29.880 --> 0:19:33.879 you are the world's authority defending yourself again against whatever, 0:19:34.560 --> 0:19:39.080 he has the world's authority absolutely and so um, what 0:19:39.200 --> 0:19:44.119 other stuff. It's mainly like calls from lawyers, yeahs or 0:19:44.400 --> 0:19:49.119 hey Mike Needle, lawyer. But also um, just just the 0:19:49.200 --> 0:19:53.080 idea that people are being hired, people have now jobs 0:19:53.400 --> 0:19:56.760 to attack a book. That that just was weird and 0:19:57.880 --> 0:20:00.400 grease balls. I mean people you just would not really 0:20:00.480 --> 0:20:03.480 you wouldn't think anybody would want on their side who 0:20:03.560 --> 0:20:07.240 are I mean transparently kind of like making it up 0:20:07.240 --> 0:20:10.600 as they go along. Uh. That that was just an 0:20:10.600 --> 0:20:12.480 odd experience. I've never had anything like that. I mean 0:20:12.520 --> 0:20:14.440 you would think maybe Solomon Brothers would have done something 0:20:14.480 --> 0:20:16.840 like that after Liar's Poker, but nothing, nothing, They were 0:20:16.880 --> 0:20:19.040 great kind of I mean there was people were upset, 0:20:19.280 --> 0:20:22.760 some people, but they did they would have done something 0:20:22.800 --> 0:20:26.480 like that. It felt the world of big shot Wall 0:20:26.480 --> 0:20:31.960 Street people has become much more um sneaky and manipulative 0:20:32.000 --> 0:20:34.919 and and dark in the sense that brad cotts the 0:20:34.920 --> 0:20:37.840 other points us out. He says, it's amazing how people 0:20:37.840 --> 0:20:41.240 think it's just the done thing to create a propaganda 0:20:41.280 --> 0:20:44.960 campaign filled lies, because the lies travel so fast and 0:20:45.000 --> 0:20:47.480 the truth is complicated, and so you can just you 0:20:47.480 --> 0:20:51.760 can just paper the paper the internet with with all 0:20:51.840 --> 0:20:55.560 this nonsense and nobody knows the difference between this this 0:20:55.560 --> 0:20:57.960 this statement and this statement. Well, thank thank goodness, something 0:20:57.960 --> 0:21:01.439 like that would never happen in a political So, you know, 0:21:01.880 --> 0:21:05.560 Matt was my experience of seeing I've always ten assume 0:21:05.600 --> 0:21:07.480 that like most people would look and say, well, clearly 0:21:07.480 --> 0:21:09.959 he's lying. Clearly he's been hired to say this credit 0:21:10.359 --> 0:21:14.919 and uh, that's not how it works. Uh. It's people 0:21:14.960 --> 0:21:16.720 to say, oh, it must be two stories there, the 0:21:16.760 --> 0:21:19.640 classic false equivalence, Well, the Earth is around, the Earth 0:21:19.720 --> 0:21:22.760 is flat. They both made yes, yes, and and uh. 0:21:23.000 --> 0:21:25.840 On the other hand, Joe says the Earth is flat 0:21:26.280 --> 0:21:28.520 and you could see it's flat. You know, you can't 0:21:28.560 --> 0:21:31.520 really see any curvature. It is flat. Yeah, So that's 0:21:31.600 --> 0:21:34.080