November 25, 2025 • 41 mins
Back in 2008, it seemed like everyone was talking about the financial crisis. And then came The Big Short, Michael Lewis' book-to-screen story that exposed the corrupt subprime mortgage industry and its impact on the 08 crash. Now, it seems like everyone's wondering: Are we heading towards another big recession? Who would you trust if you were that very man who exposed that broken system in the first place? Kal gets candid with journalist and author Michael Lewis about our financial future, who he trusts with his money, and why.
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Speaker 1 (00:01):
I am the son of immigrants and have son of
immigrant energy, which means I just save everything. I tend
to not really spend that much money because I'm saving
for the rainy day that we all know is going
to come. But there are a lot of signs pointing
to the economy taking a potential left turn. Here the
report card that tracks how the economy is doing, it's
(00:21):
called the Leading Economic Index has been falling for months.
Big banks like UBS are saying there's a high chance
of a recession soon. And then you have economists who
individually are sort of like, oh, the odds are like
fifty to fifty within the next year. But at the
same time, fewer houses are being built, companies are hiring less.
There's obviously an affordability crisis in major cities, but in
plenty of places around the country. And that's why we're
(00:43):
here today. And instead of instead of scaring you further,
I thought, why not talk to somebody who actually knows
and has written about the two thousand and eight financial
crisis and can help us understand whether we're headed for
a new one.
Speaker 2 (00:56):
You know, it's funny.
Speaker 3 (00:56):
I don't live my life in fear of a financial crash.
So I'm not thinking, oh, it's always this way, but
because you.
Speaker 2 (01:02):
Have gold under your bed, that well actually do a
little bit, just a little bit.
Speaker 1 (01:11):
Here we go again, again, again, again. This is here
we Go Again, a show where we take today's trends
and headlines and then ask why does history keep repeating itself?
I'm Calpin, here we go.
Speaker 2 (01:42):
I'm here, Michael cal So.
Speaker 1 (01:46):
Let me brag a little bit about the person across
from me. I'm a big fan of Michael Lewis. Michael
Lewis is one of those rare people who can take
really complicated, insane things like Wall Street creed or baseball
statistics and them digestible in like a page turning. This
is a thriller sort of a way. He's written books
like The blind Side and The Big Short. The Big
(02:06):
Short just got re released as an audiobook, which Michael
narrates for the very first time. He's got a podcast
about trust in modern life. It's called Against the Rules.
So basically, I'm nerding out hard because I love complicated
things that can be distilled down for like a nerdy
dummy like me, and I'm fortunate enough to get to
ask him the question that's been on my mind. Are
we going to live through another two thousand and eight
(02:27):
financial crisis?
Speaker 2 (02:28):
I hope not?
Speaker 1 (02:29):
But then who can I actually trust with my money?
Speaker 2 (02:31):
So? What are we doing? What is this? Tell me something?
Speaker 1 (02:35):
I remember Michael the first time I saw Moneyball, and
obviously I'm a big fan of the big short and
my first question was, all, how do I get cast
in this? Because there are hell of shady brown guys
in the finance world, many of whom are now in prison.
I'm trying to get life rights to some of these stories. Also,
I'm from New Jersey, so if we want to talk
about like shady guys in the finance world, I know
(02:57):
some of them, having grown up with County. But I'm
a big fan. I appreciate you being here. In prepping
to talk to you, I thought about two thousand and
eight financial crisis, and sort of after it, I learned
that an old friend of mine at the time, pretty
good college friend, had been directly involved in the following way.
(03:19):
He was selling subprime mortgages for one of those big companies.
And so, I, you know, I was a little bit
on my soapbox, I think like most of us were,
and I wanted to learn what it was like to
cause that much harmed to vulnerable people. And I think
maybe part of the problem was I asked it in
that way, and I was kind of reminded of how
naive I am sometimes, because this guy's answers were basically
(03:43):
that he and everyone else knew that what they were
doing was wrong all along. He couldn't resist all the
bonuses and the new clients that he was getting by
selling these subprime mortgages. Everything turned to shit. These guys
basically just shrugged and said oh well and moved on
to a different job. And then when all was said
and done, there were like zero consequences for him and
kind of anybody in his position, with the exception of
(04:06):
maybe like losing my respect, which I don't think he
cared to found much to begin with. But that's always
bothered me because aside from the sheer moral outrage, there
was this huge lack of consequences, and I just sort
of was thinking, like, you know what, what's stopping these
people from doing this kind of shit again? So namely,
I thought maybe we'd open it.
Speaker 2 (04:26):
Can stop? Can I stop your yes?
Speaker 1 (04:28):
Please please?
Speaker 3 (04:29):
I want to unpack that little anecdote. So when you
encounter him and he explains what he's doing, is still
peak craze or is it after the fact.
Speaker 1 (04:37):
It's after the fact.
Speaker 2 (04:39):
So's it's all collapsed.
Speaker 1 (04:41):
It has all collapsed.
Speaker 2 (04:42):
Yes, And the fact that you say, you know, people just.
Speaker 3 (04:46):
I think people are bewildered by the idea of selling
subpower mortgages because you think, as your homeowners take out mortgages,
the idea of these things being pedled like you're trying
to persuade people to take out alone and that as
an act of sales to people who already have dicey
credit right there, there's like, like, what is this?
Speaker 2 (05:07):
It's not intuitive?
Speaker 1 (05:10):
No, and this was this is what kind of enraged me.
Is like, you know, I mean the son of immigrants
who whose immigration story is very different. My parents both
speak English, they're multi lingual. They moved to the United
States with advanced degrees. So when I hear stories of like, oh,
somebody didn't know what they were signing, my first reaction
is well, boo fucking who, Like who told you not
(05:30):
to read all the paperwork? But then you talk to
guys like this who are literally peddling something saying like Oh,
don't worry about it. I'm your friend. Don't worry about
the fine print. Knowing that these people are going to
default on their mortgages at some point, but that there
was a bonus in it for him was insane to me.
Speaker 3 (05:46):
And there's you know, there there's a eons of habit
baked into the minds of the consumer, and it's a
bit like it's a bit like junk food.
Speaker 2 (05:57):
Like that, you you know, baked into our brains.
Speaker 3 (06:00):
A scarcity so that anything you get thrown at you,
I'll just take more and more and more and more.
Speaker 2 (06:06):
And the idea that.
Speaker 3 (06:07):
Someone's going to give you a loan that you shouldn't take,
it's a little hard to get your mind around that.
You're thinking, like, well, if they're lending it to me,
they know what they're doing. You know that I should
It means I should do it. So my first reaction
when I started to hear the story of the subprime
crisis back when I was working on the Big Short
was like, well, you know, people shouldn't borrow money they
(06:29):
can't repay. It was less sympathetic. The more I dug
into it, the more predatory it all felt. And that's
not to let everybody off the hook. But you were
right to be outraged by.
Speaker 2 (06:40):
Your friend's behavior.
Speaker 3 (06:41):
It was just where high finance met the working class,
that border, where someone was who understood these things was
actually peddling them to someone who didn't.
Speaker 2 (06:53):
Was maybe the ugliest part of the whole event.
Speaker 1 (06:57):
So what I was going to say was, if you like,
let's say we went back to two thousand and six
leading up to two thousand and eight, as if I
was like a five year old, what are some indicators
that we could see as like normal people that were
heading towards this crash in two thousand and eight.
Speaker 3 (07:11):
It's funny I asked the same question of all my
characters back in the day, and just recently re asked
them for the podcast I'm doing alongside The Big Short,
And I said just that.
Speaker 2 (07:24):
I actually said, like an eight year old or a
seven year old.
Speaker 3 (07:26):
And Steve Eisman, who was played by Steve Steve Correll
in the movie, looked at me. He said, you can't
explain this to a five year old, He said, you
can explain this to I, haven't we start with.
Speaker 2 (07:36):
A twenty year old?
Speaker 1 (07:37):
Yeah?
Speaker 2 (07:38):
Fine, great, but okay, no, I'll do my Yeah. So
five year old's a little rough. But can can we
be a little older? Yeah? Please? Can me a little older?
Speaker 1 (07:45):
You picked the age twenties.
Speaker 3 (07:46):
I'll pick the age, but I'll just try My mother
an eighty eight year old. So what happens here? Your
friend was selling subprime mortgages, and which is a weird idea, right,
you have to get your mind around that. He's run
around looking for people who probably shouldn't borrow the money
to borrow the money to buy a house. And your
friend is only doing that because your friend is not
(08:06):
going to sit there with the loan. Your friend isn't
lending you that person the money himself. He's not going
to sit there. He's going to lose any money if
if those that person eventually defaults, as they turned out
likely to do. So what your friend is doing is
acting on behalf of some bigger mortgage lender who will
(08:27):
then take the loans and hand them off to I
mean there'll be sometimes multiple stages, but a big Wall
Street firm eventually and a city group, a merrill lynch,
a goldman's axe who will put them all in a
big pot. All these loans and the pot you know
what's coming into that pot is mortgage payments from all
(08:50):
these people who bought the houses, and that can be
turned into a bond, you know, It's just like that
looks like a bond, so they can sell it off
as pieces of paper in this pool of mortgages. Now
who ends up owning it? That at the time was
one of the great mysteries. This stuff went all over
the world, and in fact, some of the big Wall
Street banks end up keeping a lot of it on
(09:10):
their books stupidly.
Speaker 2 (09:12):
But along the way.
Speaker 3 (09:13):
The big point is the person making the loan is
not exposed in any way. The person's physically doing it.
They have no incentive for the loan to be a
smart loan, incentive to generate as many of the loans
as possible. They also have an incentive because these loans,
you know, the general characteristics of the loan are evaluated
by the people who are taking the loans off the
(09:33):
hands of that person who lent the money. So the
fight the credit scores. How much money do they put down?
All that stuff they would make a loan riskier or
less risky. They have an incentive to lie about that
or game it in some way. So what happens there's
a chain. This loan gets passed through several hands and
(09:55):
eventually ends up being held by some investor in the
form of a bond. But along the way, in various ways,
the risk gets disguised, and along the way it gets
packaged into these big and big black boxes, and the
boxes get harder and harder to see inside of, so
that it takes superhuman sort of analytical research diligence to
(10:22):
figure out what the hell of the loans are behind
the bonds, and that in fact, the characters are the
big short one of them. Anyway, you know, he distinguished
himself of actually going into the black box and seeing,
oh my god, there's a stripper. There's a stripper in
Las Vegas with twenty seven houses. You know, it's that
kind of thing. So what makes it possible is one
(10:43):
the neediness at the bottom of the chain, the neediness
of the person who is borrowing the money in.
Speaker 2 (10:47):
The first place, the desires.
Speaker 3 (10:50):
As one of my characters put it, this market was
totally a reflection of the working class Americans inability to
live up to their expectations, and financial expectation is that
their salaries were not meeting and.
Speaker 2 (11:02):
This sort of filled the hole, so it starts there.
Then it's like your.
Speaker 3 (11:06):
Friends immorality, willingness to to exploit, to make these loans
people wh shouldn't have them, the willingness of the whole
financial system, the big banks to disguise the risk in
the loans and their ability is subsequently to pedal these
loans in the form of bonds to like German investors.
Speaker 1 (11:25):
That's what you mean when you say stuff went all
over the world.
Speaker 3 (11:28):
It went all over the world. And part of the
reason there's a crisis is that no one knows how
much of it there is or who's got it. So
it's like you can't nobody trust anybody at that moment.
Speaker 2 (11:40):
It's like, are you bankrupt too? Are you not?
Speaker 1 (11:43):
A big date when Lehman Brothers went bankrupt was September fifteenth,
two thousand and eight. For somebody who does what you do, like,
is that a date where you remember what you were doing,
remember what you were thinking, or did things follow that
showed you the gravity of that day.
Speaker 2 (12:00):
I was already into the book I was.
Speaker 3 (12:04):
I was already reporting the big short when bear Stearns
went down in whatever February. I didn't remember the dates.
I locked in on it. I started to kind of
kick around and talk to people. I can't remember where
I was when Lehman went down. And you know what's
funny is not only can I not remember where I was,
I remember vividly where my characters were, who I cared about.
(12:27):
I started to live this through my characters. And there
was a scene that I thought was going to end
the movie, and it ended the book where these characters
there were. The firm was called Front Point Partners. It
was an obscure hedge fund that mainly traded in stocks.
Had figured out that all the Wall Street firms were
making this mistake and made this big bet against the
(12:47):
subprime mortgage market. And they were so disoriented by being
proved so right that it wasn't just they were going
to get rich, but maybe the whole world was going
to come down, Like it was just a little unclear
at that moment whether you know, capitalism was going to survive.
Speaker 2 (13:07):
Kind of thing. It was that it felt that dire
to them.
Speaker 3 (13:11):
They were so aware of just how badly behaved the
financial system had been. They imagined a cataclysm even greater
than the one that occurred, and.
Speaker 2 (13:20):
They all wandered the streets. There were four of them.
They wandered the streets of Manhattan and converged on.
Speaker 3 (13:24):
Saint Patrick's Cathedral and sat on the steps and just
watched the people like they were ghosts, passing them by,
and say, those people do not know what's about to
hit them. So when I think about that day, I
wasn't there. You know, they just told me about this.
It's their experience that pops to mind.
Speaker 1 (13:40):
What was the result of that financial crash for people
in your lives? Like I obviously know this guy who
was selling some mortgages, and I had friends who you know,
lost money in retirement or money that they had saved
up for their kids college. But did any of your
neighbor's friend's family lose jobs houses? Did you see anyone
(14:01):
on the news that you knew that you were researching?
Like what was that impact like for you?
Speaker 3 (14:07):
But you know what actually popstimized nothing that I was.
So I was reading the news of other people's people.
I didn't know their tragedies. It wasn't hard to imagine them.
I had old colleagues on Wall Street whose careers went
up in flames and in some cases kind of unjustifiably,
you know, it was a funny thing I worked. I
(14:28):
worked at Solomon Brothers in the nineteen eighties, you know,
in the Stone Age, but that as it happened.
Speaker 2 (14:33):
This is one of the reasons I got I took
an interest in the story.
Speaker 3 (14:37):
Is I was there basically when the mortgage bond market
was being invented by Solomon Brothers.
Speaker 2 (14:42):
Uh huh.
Speaker 3 (14:43):
So I saw, you know, Frankenstein's monster be created, and
now I was watching the monster come back and eat everybody,
and the people who had created the monster knew what
the monster was capable of.
Speaker 1 (14:54):
Were everyone's reactions like that? Like, I assume you called
a lot of these people up, like the idea of that,
oh shit, we were the ones that created this. Was
that across the board or or by the way, is
this truly one of those like there are five puppeteers
at the top type of situation and they're acknowledging it,
but everybody at the deputy level is pretending they had
nothing to do with it.
Speaker 2 (15:14):
So here's the weird thing. Maybe it's not so weird.
Speaker 3 (15:17):
You know how it's easy to confess to something that
you actually didn't. It's not that damning to confess to
Oh I work too hard. Oh, I care too much,
my biggest too, I loved you, I love too well,
it's not quite that. But no one was going to
prosecute Louis Ranieri for creating the mortgage bond. No one
was going to no one was probably going to completely
(15:38):
buy he was really responsible for someone taking the mortgage
bond and doing awful things with it.
Speaker 2 (15:44):
So there's something a little disingenuous about taking.
Speaker 3 (15:47):
The blame for the whole thing when you're not to.
And the people who were to blame this answer your question.
They were people inside the Wall Street firms in two
thousand and six to two thousand and eight who really
really should have taken the blame. And none of those
people got up and said, oh I'm sorry.
Speaker 1 (16:06):
No for any of them, Right, you just said nobody's
nobody's going after that that top guy. But for any
of them, the top guy or anybody in the middle,
did they actually technically do anything illegal.
Speaker 2 (16:17):
It's a really good question.
Speaker 3 (16:19):
And I have a friend, the writer Michael Kinsley, who
always says the scandal isn't what's illegal, it's what's legal.
A large part of the story of the crisis is
it's scandalous how much of this was legal, Like how
much you could define print got you off the hook
because it was immoral. It's you know, the idea that
for example, Goldman Sachs could conspire with John Paulson, short
(16:42):
seller who wanted to bet against subprime mortgages, to create
billions and billions of dollars of side bets on the
very worst mortgage bonds they created, so so so paulse
could bet they were going to go bad. And these
are just like it's just like it's a you can
think of it as like replicating the worst loans to
infinity and injecting those things into the financial system. So
(17:06):
getting other people Germans or whoever to take the other
side of that bet.
Speaker 2 (17:11):
Now maybe that's legal, it is legal. It's horrible.
Speaker 3 (17:14):
It's like because you're essentially introducing pollution, are a poison
into the financial system, and so you can take a
little profit off of it.
Speaker 2 (17:23):
People who know more than I do would tell you
that people.
Speaker 3 (17:27):
In firms hid or ignored reports of how bad.
Speaker 2 (17:32):
The mortgages were so no one would know.
Speaker 3 (17:35):
So that, you know, is that fraud. Maybe you could
get people on fraud. It was hard if you go
if you rewind the tape at the very beginning.
Speaker 2 (17:44):
You may not.
Speaker 3 (17:45):
You know, I don't know sure this is even in
the book, and my memory of it is going to
be a little fuzzy. But bear Sterns had a fund
that was attached to bear Sterns that went down, and
it went down because they.
Speaker 2 (17:56):
Were actually they owned a lot of this stuff.
Speaker 3 (18:00):
US prosecutors tried to put the people who ran that
fund in jail, and the trial was in New Jersey
and this was early early financial crisis, and not only
did they fail, but the jur there were jurors quoted
in the newspaper afterwards saying, can you get me the
number of those guys from barristers? I wanted them to
(18:23):
I think have I wanted to invest my money for.
So there was such a there was such a There
was such an at the very beginning, they were prosecutors
who were embarrassed trying to kind of like prosecute this thing,
and it was hard, it was so complicated. So the
answer is, I don't I'm sure people broke the law. Basically,
(18:45):
no one went to jail. In retrospect, the whole society
would have been better off if they've been at least
an attempt to prosecute the very topic there wasn't.
Speaker 1 (19:01):
Yeah, so then if there was no attempt made to
prosecute and it sounds like if you know, okay, you
did all these fifty things wrong that caused this massive,
awful global collapse, but technically the only thing we could
get you on is fraud, then that makes me wonder
all of the conversations about how fragile the economy is
again today, are there systems in place to prevent another
(19:24):
crash in the way you just described it? And if so,
what are they? What are they responsible for? Putting a
check in? And it did the current administration dissolve any
of them? Like did they exist post two thousand and eight?
But then over the political spectrum have they been kind
of watered down themselves?
Speaker 3 (19:42):
So there is a deathless problem in the financial system always,
and it gets worse the more complicated it gets, and
the financial system gets it's more and more complicated, And
the problem is that people get paid more to take
more risk, and the best way to get paid more
for taking more risk is disguise the risk you're taken
(20:02):
and not actually take the risk yourself. The system is
always looking to hide the risk. So part one of
the answers to you this question you just asked, is so, yes,
things that systems were put in place, constraints were put
in place, and specifically the banks were neutered. They can't
take the same kind of risk that those banks, you know,
(20:24):
City Group, Maryland, Morgan Stanley, Bank of America, that they
have more capital and they're not allowed to roll the
bones in the way they roll the bones way back
when they're much more boring. Places they themselves are unlikely
to be the place where the risk gets hidden.
Speaker 2 (20:42):
However, the risk still wants to be taken.
Speaker 1 (20:44):
Yeah, and I feel like they know the people taking
the risk.
Speaker 3 (20:46):
And yeah, they know the people getting the risk, and
they're getting more and more involved. The place where the
risk is being taken are places that you maybe or
even just barely conscious of.
Speaker 2 (20:56):
The place is called Apollo and Blackstone.
Speaker 1 (21:00):
These are all private equity.
Speaker 3 (21:02):
They're all private so they're all they're all way outside
regulatory framework that top stops the banks from So it's
like you squeeze the orange and the juice went outside,
and the juices outside and it's floating or it's sloshing
around and it's hard to know.
Speaker 2 (21:20):
I mean I had someone tell me the other day.
I mean someone who.
Speaker 3 (21:24):
Watches these places closely that Blackstone areas Apollo, who are
now making they have trillions of dollars and loans they're
making there used to be That's not what they used
to do, the especially doing banking outside the banking system,
told me that they've these are the institutions that are
now too big to fail.
Speaker 2 (21:42):
By too big to fail.
Speaker 3 (21:43):
I mean that if they were to fail, the government
would come in and backstop them so that anybody who's
got money in them won't lose their money. And we
don't know exactly how it's going to go down, but
the risk that they're terrified of is that it's the
financial next oneancial crisis starts there. I do not know
if that's true. Uh huh, I just I do know that,
(22:05):
you know, people follow their incentives in the financial system,
and if you can find ways to get paid short
term for taking.
Speaker 2 (22:11):
A lot of risk that won't go bad for a while,
people will do that.
Speaker 3 (22:15):
And the risk goes bad when the risk goes bad,
and between now and then, people make a lot of money.
Speaker 2 (22:21):
I mean, this is why these things go in cycles.
Speaker 3 (22:23):
It's partly memory and partly it takes a little while
for the financial system to figure out how to hide
the risk again.
Speaker 1 (22:28):
But so if people are making money in the short term,
then who's losing money in the long term when something.
Speaker 3 (22:34):
Collapses, Well, if the collapse occurs in an institution that's
too big to vail, the first approximation is the taxpayer
their government comes in. It's more complicated than that. Let's
take a single simple example. There was a trader at
Morgan Stanley in the run up to the financial crisis
who I think was paid fifty million dollars in bonuses
(22:57):
for his supposedly clever trades in the subprime mortgage more
he was effectively long in the market, effectually owns subprime
mortgage bonds.
Speaker 2 (23:05):
More complicated than that, but roughly so.
Speaker 3 (23:08):
When his trades go bad and Morgan Stanley loses on
his trades ten billion dollars, first place, it's Morgan Stanley's shareholders.
Second place, it's any taxpayer of funds that come in
to bail out Morgan Stanley. But he never got he
never had to give his bonus back.
Speaker 1 (23:24):
That's crazy.
Speaker 3 (23:26):
It's crazy. So it's crazy. So that's the problem. Where's
the in New Jersey where they all.
Speaker 1 (23:31):
Go to see? This is what did I say when
I opened? I knew plenty of people growing up who
were who were shady as hell, and it wasn't just
the mafia ties.
Speaker 2 (23:40):
No, you got to you got to find all us
in New Jersey. Yeah. New Jersey's is filled with characters.
Speaker 1 (23:45):
That's a very diplomatic way of putting here.
Speaker 3 (23:47):
Probably gambling on sports. I don't know what he's doing,
So they're just The problem is incentives. People follow their incentives,
and a really complicated system starts to generate screwed up
incentives and people do screwed up things.
Speaker 1 (24:00):
Can I just want to very simply try to recap
something that you said to make sure I understood it
properly that I was curious what laws have changed to
make sure that the same thing doesn't happen as what
happened in two thousand and eight. And you're saying that
all of the risk then went to private equity, which
(24:20):
means there's zero oversight. So we've collectively decided as a
society that instead of putting proper checks and balances to
prevent the system from repeating those mistakes, we're just going
to make it so that nobody can see what those
mistakes are. Is that correct?
Speaker 2 (24:36):
That's not a bad way of putting it.
Speaker 1 (24:38):
That's fucking crazy.
Speaker 3 (24:40):
It's it's a little more complicated than that. It wasn't
just it's not just private equity, but it is true.
It is crazy. On the other hand, let me argue
against myself a moment.
Speaker 2 (24:51):
Well, I do think.
Speaker 3 (24:53):
Where this all starts for me, where the financial crisis starts,
is when these bank these investment banks, acts and Solomon
Brothers and Morgan Stanley and so on in the eighties
and early nineties go from being private partnerships to being
public corporations. Because it is true that when they're private partnerships,
(25:14):
the people who own them are the employees, and it's
they're exposed. They don't want to do really stupid things
when they're exposed.
Speaker 1 (25:22):
They're exposed in what way?
Speaker 2 (25:23):
What does that mean?
Speaker 3 (25:24):
Well, so if Lehman Brothers when it went down, had
not been a public corporation, it had been back what
it used to be, it was owned by the employees,
all those you know, Dick Fold and all the people
who own ran that place, would have not only lost
all the money in the place they would lost their houses.
You know, they would have been they would have had
unlimited liability for the things that happened there.
Speaker 2 (25:46):
They wouldn't have behaved that way.
Speaker 3 (25:48):
They wouldn't have taken this risk, this catastrophic risk for
short term return, because they knew that when the catastrophic risk,
they would have sensed it. When things went bad, they
were on the hook. So I do like that structure,
and that structure in some ways, I think Wall Street
has been remoralized in that jump trading in Jane Street
(26:09):
and Citadel. These are all private companies and if they
go bad, if they do really stupid things, the people
who run them are going to feel a lot of pain.
So I think they'll behave more intelligently. The big private
equity firms, I think most of them are there are
their public companies, so we in that case, So the
ones who are doing all this banking, this kind of
(26:30):
I don't know what you call it shadow banking or
whatever you call it, they're actually making the loans and
trillions of dollars loans. They have the same problem as
the old banks did going to the financial crisis, and
it is essentially, you know, one there's a phrase that
people use on Wall Street, regulatory arbitrage, which just means
moving the risk to places where the regulators.
Speaker 2 (26:51):
Can't see it. Geez the word for it. And so yeah,
so I mean that's that's what's going on. That's what's
going on.
Speaker 1 (27:00):
Does this moment that we're living in, like right now,
does that feel different than any of the other moments
that we've lived through or are people always scared that
we're headed towards a financial crash?
Speaker 2 (27:13):
You know, it's funny.
Speaker 3 (27:13):
I don't live my life in fear of a financial crash,
so I'm not thinking, oh, it's always this way.
Speaker 1 (27:19):
But because you have gold under your bed, well.
Speaker 2 (27:22):
Yeah, I actually do a little bit, just a little bit.
But the it's it always.
Speaker 3 (27:28):
Feels different, right What feels different now to me is
in an alarming way. The reason we endured the financial
crisis without social collapse, without depression, without thirty percent unemployment,
without like political chaos, all the rest was we had
(27:48):
these institutions, the Federal Reserve, the Treasury, Federal Reserve especially,
and the independence of the Federal Reserve, its ability to
be the grown up in the room. And I used
that with this word carefully, but the trusted institution. No
one really doubted in two thousand and eight that the
federal government, the US federal government had the wherewithal to
(28:12):
backstop all the risk, to come in and say, all
these banks made all these shitty loans. They're all going
to go to business, but we're going to be able
at the banks. So the banks are going to be
calmed down. Everybody, don't pull your money out of the banks.
The banks can continue to do their business as they
always do their business.
Speaker 2 (28:27):
We're good for it.
Speaker 3 (28:28):
And the Federal Reserve bought trillions of dollars of mortgages,
you know, they took the loans off the books of
the banks. Turns out they made a lot of money
doing it. I mean they bought them at distress prices,
so it all worked out. But the premise of this
whole resolution was the existence of a trusted grown up
(28:48):
whose credit no one doubted. We are now in a
situation where we have an administration that is dying to
get its hand on the Federal Reserve and essentially eliminate
all trust in it, which is what will happen if
they get their hands on it, like make it politicize
the institution and our federal government's finances seem uncontrollable, and
(29:10):
so what happens if there's a financial crisis without a
trusted adult's that's what feels different.
Speaker 2 (29:17):
Like if people run.
Speaker 3 (29:18):
For gold or bitcoin or whatever, the next time things
start collapsing, will the promise of the US government to
bail everybody out stop them? Like say, oh, okay, I
believe that, Yeah, yeah, I do want hold these dollars
that you're going to print gazillions more of. Yeah, yeah,
I really do believe the Federal Reserve is going to
(29:40):
is to calm everything down. And I just I just,
you know, it's it's not we've reached a point where
those institutions can't function, but they've been really weakened. And
I just don't know how a financial crisis plays out
without an institution that you trust.
Speaker 1 (30:01):
The trust part of it, I'm so curious about. I
think about this a lot also, not just by the
way government institutions, but all of these legacy institutions that
I think people are questioning, right, your newspaper, your you know,
I'm a biased artist, First Amendment advocate all of the
everything from you know, Biden and Harris's crackdown on college
(30:22):
campuses for free speech, right up to Jimmy Kimmel getting
taken off the air for free speech. Like there are many,
many multifaceted sides to that conversation, but a lot of
it distills down into do we trust ABC and Disney?
Do we trust the New York Times?
Speaker 2 (30:37):
Yeah?
Speaker 1 (30:38):
What are we trusting these institutions? So it's not just government.
So I'm curious, like when you wake up every morning,
where do you go for your information? Who do you trust?
Who do you trust with your money? Like the like
you know gold jokes aside, are you in residential? Are you?
Speaker 3 (30:53):
It wasn't a joke for me too? No, I know,
So I will tell you. I'll tell you what do
I do? How do I live this way? Where do
I place my trust? I do not share Americans seemingly
complete distrust of media. It is amazing how untrusted the
media is in our country right now.
Speaker 2 (31:14):
I've written for the New York Times and the New
Yorker and.
Speaker 3 (31:18):
All these places, and I know there are referees who
are there to make sure you're not just making stuff up,
you know, And having said that, this is an important point.
I can remember when I first became aware of the news.
I mean, like it as a thing that you just
(31:40):
didn't take on faith. And it was when I was
at Solomon Brothers when all of a sudden I was
doing something that was in the news. I was in
the Solomon Brothers training program and a New York Times
magazine writer came through and wrote about our training program.
Speaker 2 (31:53):
And then I was twenty three or years old.
Speaker 3 (31:56):
I was, you know, basically a kid, and I looked
at and I thought, well, it's not it's.
Speaker 2 (32:00):
Not completely wrong when she wrote. But it was like
it wasn't completely right. She missed it shouldn't have it. It
wasn't that she had an angle. It was just that
she didn't know very much. You know. She was there
and talked to a couple of people.
Speaker 3 (32:12):
So then a penny drop for me, Well, if this
is true of something I know about, what about all
these things.
Speaker 2 (32:19):
I don't know about.
Speaker 3 (32:20):
If I'm reading about the Arab Israeli conflict, what's the
likelihood that they've got that anymore?
Speaker 2 (32:25):
Right?
Speaker 3 (32:26):
And so assume the persons more or less trying to
do their best and has some bias, and sometimes they
reveal their bias, but mainly it's just like the nature
of news gathering is pretty shallow, so how getting out
of How do I live my life? So I hold
it all kind of loosely.
Speaker 2 (32:40):
But I read the New York Times. I glance at
the Washington Post. I read the Wall Street.
Speaker 3 (32:46):
Journal, you know, very useful to me because it's coming
from a completely different spaces.
Speaker 2 (32:50):
The Financial Times they just sort of like they're Switzerland.
Speaker 3 (32:54):
They don't they like they're looking at what's going on
in America, like they're looking at Mars.
Speaker 2 (32:59):
And that's very helpful. So those are newspapers.
Speaker 3 (33:02):
I let all kinds of podcasts and stuff in I graze,
I get more, more sources, less deeply. In the last
ten years, I've not read the New York Times as
deeply as I read the New York Times twenty years ago.
Speaker 1 (33:16):
And it's much shorter now anyway.
Speaker 2 (33:19):
And my money where I do? Where do I keep money?
Speaker 1 (33:22):
Where do you keep your money? So who do you trust?
Speaker 3 (33:25):
Schwab huh very important. They don't take big positions themselves.
They were notably like they were not in trouble during
the financial crisis. JP Morgan, As I figure that in fact,
I don't know. I got to say I don't understand why.
Speaker 2 (33:41):
Anybody keeps more than you know.
Speaker 3 (33:43):
Whatever the deposit insurance now is at a local bank,
at a regional bank. It's their handful of banks that
are implicitly federally guaranteed, like too big to Fail, and JB.
Morgan is the biggest and the best run and a
little bit out of the country, like not a lot,
but a little bit out of the country. And that's
a I lived in London when I started my writing career,
(34:05):
and so I had to have a bank account.
Speaker 2 (34:06):
I just kept that bank account in London.
Speaker 1 (34:08):
Oh cool, Okay.
Speaker 3 (34:10):
But what I invest in in my weak moments, I
will very occasionally buy a stock of a company, of
an actual company.
Speaker 2 (34:19):
It's almost always a mistake.
Speaker 3 (34:21):
I get lucky and don't I never know enough to
actually I know, I know, I don't know more than
the market and I and I get excited about something
and I ignore the fact that I don't know. Mainly
index funds and Berkshire Hathaway, which is a kind of
index fund.
Speaker 2 (34:35):
It's a big fund. And then gold.
Speaker 3 (34:38):
So I have a friend who runs money, who was
a high school friend. He became a libertarian, he became
an iron Randian. I lost track of him until the
financial crisis. I heard he was working for bear Stearns.
I was worried about him. I call him up and
he's got this excited tone of his voice, even though
I haven't talked in twenty years.
Speaker 2 (34:57):
It's like we was yesterday. It goes, Michael, Mike, I can't talk.
Speaker 3 (34:59):
I'm and I said, I'm just worried about you, and
he goes, no, no, no, I'm sure he had a fund
outside of Bear that bear Stearns funded, and he made
the big short. He made the trade, and he gave
me a little lecture ten years ago about the debasement
of the currency and the history of currency debasement, and
it so spooked me that I just thought, Okay, I'm
gonna buy some gold. So I actually bought some gold,
(35:22):
and it's gone up and up and up. And I
can't recommend it really, except that.
Speaker 1 (35:29):
It's worked for people who are listening. Why specifically gold
because your friend told you to or because there was
something else.
Speaker 3 (35:37):
So the argument is gold has no intrint really, it's
not worth thirty six hundred dollars.
Speaker 2 (35:42):
Announced it's use value.
Speaker 3 (35:45):
The argument is it has social trust. You can't explain
why or how it got this, but it is ingrained
in us, in human beings, to believe this thing is
valuable and to run to it when all else doesn't work,
and every he agrees to do it, even if they
aren't conscious of it. And so when things go really bad,
(36:06):
it's going to go up. And there's saying why you.
I mean, it's just it's got a history. But I
do feel I got to say, I don't feel completely
comfortable with my holding. I bought into this idea that
my friend sold me, sold me over an afternoon.
Speaker 2 (36:23):
I thought.
Speaker 3 (36:24):
Part of what I was thinking is will be a
fun way to keep in touch with him, is I'll
buy some of it and we will be talking about it.
And then it just started going up so fast I
forgot about my friend and thought about, wow, I.
Speaker 2 (36:34):
Got a bunch of gold. So that's what happened.
Speaker 1 (36:39):
I'm going to ask you a couple of rapid fire
trust questions. Do you trust the following?
Speaker 2 (36:43):
Can we do one to ten? Or is it yes
or not?
Speaker 1 (36:45):
Sure? You could do one to ten? Yeah, one of
ten's great. Do you trust the front page of the
New York Times?
Speaker 2 (36:51):
Eight? The front page?
Speaker 3 (36:53):
Yeah, I mean the New York Times generally eight seven
and a half eight. In these times, people have been
run out of New York Times for being wrong thinking
in the last ten years. You can't you know the
James Bennett episode.
Speaker 2 (37:05):
That kind of stuff.
Speaker 3 (37:06):
Printing something that offended other people gets people fired.
Speaker 2 (37:10):
That's outrageous. So that that is that has caused my
trust in the New York Times to decline.
Speaker 1 (37:16):
That's well said. Okay, what about the front page of
the New York Times style section.
Speaker 2 (37:20):
Ah, that's stuff. That's ten baby, there it is.
Speaker 3 (37:23):
And by the way, ten being in the most asked me,
it doesn't really ask me to trust it.
Speaker 1 (37:28):
It's critical for an idiot like me who has no
sense of style and is trying to learn because I.
Speaker 2 (37:32):
Trust, don't do that.
Speaker 3 (37:34):
Don't do not figure out which colored T shirt to
wear or whether you can wear shorts in the winter
from you.
Speaker 2 (37:40):
Don't don't do that.
Speaker 1 (37:41):
Okay, Street tacos in Los Angeles four Ooh, hard to start.
Speaker 3 (37:48):
I have a very sensitive stomach and I've had some
bad experiences.
Speaker 1 (37:51):
Okay, that's fair. I would do I would do it
in an eight point five or nine. But if it's a
stomach issue, I.
Speaker 2 (37:55):
Get it's a stomach issue.
Speaker 1 (37:57):
Okay, then let's move on to hot dogs. Hot dogs
at Yankee Stadium.
Speaker 2 (38:00):
Oh god, five, I'm sorry.
Speaker 3 (38:03):
It's and it's just and it's it's also just like,
as I've gotten older, the appeal of the hot dog
has declined, and it's declining.
Speaker 2 (38:10):
It won't it's asymptotically. I don't think it will go
to zero.
Speaker 3 (38:14):
But it went from oh, this is a natural thing
that a human being should eat to I really I
feel the same way about pop tarts.
Speaker 2 (38:21):
Like if if if like someone from.
Speaker 3 (38:24):
Outer green little green man from outer space, came down
and stared at this thing, would he yet identify it
as a food? And it probably not? And there's probably
a good reason for that.
Speaker 1 (38:35):
Okay, social security.
Speaker 3 (38:40):
A six and a half seven, and that is just
it's going to be inflated away.
Speaker 2 (38:46):
I mean, the value of that. I think the value
of the benefits will be eroded.
Speaker 3 (38:51):
I don't think the population will put up with it
just being taken away, because people have it in their
head as I paid for this, that's my money. It
just so, I mean, you can print, always print more dollars,
so we'll get some of.
Speaker 2 (39:05):
It, but not what you'd hope for.
Speaker 1 (39:08):
Congress.
Speaker 2 (39:10):
I mean, I got to ask trust to do what.
Speaker 3 (39:13):
I mean, I could ten in some ways in one
another is it's here's the conundrum, the thing that I
can't get out of my head about Congress. If you
go in and spend time with the individuals, as I've
actually i've done recently, I always come away feeling good
about the people. I always come away feeling bad about
their circumstances, like the situation.
Speaker 2 (39:36):
And so I come.
Speaker 3 (39:36):
Away thinking, it isn't the actual people we're putting in
there that's the problem. It's the situation we put them in.
So the things about the structure of the institution that
are catastrophically bad. So I actually kind of trust the people,
like when I meet them and spend time with them,
but I know that the institution is going to end
(39:57):
up in a not a good place.
Speaker 2 (39:59):
So anyway to ten, if you put this to the
American public, you get a one.
Speaker 1 (40:03):
Yeah, three, Okay, Well my last my last two trust
things were gold and you're weed guy, And I know
how you feel about gold.
Speaker 2 (40:13):
You know I gold eight. But my we guy.
Speaker 3 (40:17):
So I have never taken a single hit. I never
I've never even tried marijuana, and you just do edibles. Eventually,
I'll probably come around edibles. Friends tell me like they'll
change my life, but I have not, so I don't
have a view of my we guy. All right, So
(40:37):
there's a level, not a we guy. So I default
to trust. So we'll say ten. I trust my week
guy ten.
Speaker 2 (40:44):
Because it cost me. It costs me nothing to trust him.
Speaker 1 (40:47):
Awesome, Thank you for your time, Michael, all Right, totally fun.
Here we go again as a production of iHeart Podcasts
and snap Fu Media in association with New Metric Media.
Executive producers are me Calpen ed Helms, Mike Falbo, Melissa Martino,
Andy Kim, Pat Kelly, Chris Kelly, and Dylan Fagan. Meghan
(41:08):
tan Is our producer and writer. Dave Shumka is our
producer and editor. Our consulting producer is Romin Borsolino. Tory
Smith is our associate producer. Theme music by Chris Kelly,
logo by Matt Gosson, Legal review from Daniel Welsh, Caroline
Johnson and Megan Halson. Special thanks to Glenn Bassner, Isaac Dunham,
Adam Horn, Lane Klein, and everyone at iHeart Podcasts, but
(41:31):
especially Will Pearson, Carrie Lieberman and Nikki Etour. Thanks for listening. Everybody,
tell your friends, write a review. All of this helps.
I appreciate you listening, and until we go again, I'm
Calpen
I am the son of immigrants and have son of
immigrant energy, which means I just save everything. I tend
to not really spend that much money because I'm saving
for the rainy day that we all know is going
to come. But there are a lot of signs pointing
to the economy taking a potential left turn. Here the
report card that tracks how the economy is doing, it's
(00:21):
called the Leading Economic Index has been falling for months.
Big banks like UBS are saying there's a high chance
of a recession soon. And then you have economists who
individually are sort of like, oh, the odds are like
fifty to fifty within the next year. But at the
same time, fewer houses are being built, companies are hiring less.
There's obviously an affordability crisis in major cities, but in
plenty of places around the country. And that's why we're
(00:43):
here today. And instead of instead of scaring you further,
I thought, why not talk to somebody who actually knows
and has written about the two thousand and eight financial
crisis and can help us understand whether we're headed for
a new one.
Speaker 2 (00:56):
You know, it's funny.
Speaker 3 (00:56):
I don't live my life in fear of a financial crash.
So I'm not thinking, oh, it's always this way, but
because you.
Speaker 2 (01:02):
Have gold under your bed, that well actually do a
little bit, just a little bit.
Speaker 1 (01:11):
Here we go again, again, again, again. This is here
we Go Again, a show where we take today's trends
and headlines and then ask why does history keep repeating itself?
I'm Calpin, here we go.
Speaker 2 (01:42):
I'm here, Michael cal So.
Speaker 1 (01:46):
Let me brag a little bit about the person across
from me. I'm a big fan of Michael Lewis. Michael
Lewis is one of those rare people who can take
really complicated, insane things like Wall Street creed or baseball
statistics and them digestible in like a page turning. This
is a thriller sort of a way. He's written books
like The blind Side and The Big Short. The Big
(02:06):
Short just got re released as an audiobook, which Michael
narrates for the very first time. He's got a podcast
about trust in modern life. It's called Against the Rules.
So basically, I'm nerding out hard because I love complicated
things that can be distilled down for like a nerdy
dummy like me, and I'm fortunate enough to get to
ask him the question that's been on my mind. Are
we going to live through another two thousand and eight
(02:27):
financial crisis?
Speaker 2 (02:28):
I hope not?
Speaker 1 (02:29):
But then who can I actually trust with my money?
Speaker 2 (02:31):
So? What are we doing? What is this? Tell me something?
Speaker 1 (02:35):
I remember Michael the first time I saw Moneyball, and
obviously I'm a big fan of the big short and
my first question was, all, how do I get cast
in this? Because there are hell of shady brown guys
in the finance world, many of whom are now in prison.
I'm trying to get life rights to some of these stories. Also,
I'm from New Jersey, so if we want to talk
about like shady guys in the finance world, I know
(02:57):
some of them, having grown up with County. But I'm
a big fan. I appreciate you being here. In prepping
to talk to you, I thought about two thousand and
eight financial crisis, and sort of after it, I learned
that an old friend of mine at the time, pretty
good college friend, had been directly involved in the following way.
(03:19):
He was selling subprime mortgages for one of those big companies.
And so, I, you know, I was a little bit
on my soapbox, I think like most of us were,
and I wanted to learn what it was like to
cause that much harmed to vulnerable people. And I think
maybe part of the problem was I asked it in
that way, and I was kind of reminded of how
naive I am sometimes, because this guy's answers were basically
(03:43):
that he and everyone else knew that what they were
doing was wrong all along. He couldn't resist all the
bonuses and the new clients that he was getting by
selling these subprime mortgages. Everything turned to shit. These guys
basically just shrugged and said oh well and moved on
to a different job. And then when all was said
and done, there were like zero consequences for him and
kind of anybody in his position, with the exception of
(04:06):
maybe like losing my respect, which I don't think he
cared to found much to begin with. But that's always
bothered me because aside from the sheer moral outrage, there
was this huge lack of consequences, and I just sort
of was thinking, like, you know what, what's stopping these
people from doing this kind of shit again? So namely,
I thought maybe we'd open it.
Speaker 2 (04:26):
Can stop? Can I stop your yes?
Speaker 1 (04:28):
Please please?
Speaker 3 (04:29):
I want to unpack that little anecdote. So when you
encounter him and he explains what he's doing, is still
peak craze or is it after the fact.
Speaker 1 (04:37):
It's after the fact.
Speaker 2 (04:39):
So's it's all collapsed.
Speaker 1 (04:41):
It has all collapsed.
Speaker 2 (04:42):
Yes, And the fact that you say, you know, people just.
Speaker 3 (04:46):
I think people are bewildered by the idea of selling
subpower mortgages because you think, as your homeowners take out mortgages,
the idea of these things being pedled like you're trying
to persuade people to take out alone and that as
an act of sales to people who already have dicey
credit right there, there's like, like, what is this?
Speaker 2 (05:07):
It's not intuitive?
Speaker 1 (05:10):
No, and this was this is what kind of enraged me.
Is like, you know, I mean the son of immigrants
who whose immigration story is very different. My parents both
speak English, they're multi lingual. They moved to the United
States with advanced degrees. So when I hear stories of like, oh,
somebody didn't know what they were signing, my first reaction
is well, boo fucking who, Like who told you not
(05:30):
to read all the paperwork? But then you talk to
guys like this who are literally peddling something saying like Oh,
don't worry about it. I'm your friend. Don't worry about
the fine print. Knowing that these people are going to
default on their mortgages at some point, but that there
was a bonus in it for him was insane to me.
Speaker 3 (05:46):
And there's you know, there there's a eons of habit
baked into the minds of the consumer, and it's a
bit like it's a bit like junk food.
Speaker 2 (05:57):
Like that, you you know, baked into our brains.
Speaker 3 (06:00):
A scarcity so that anything you get thrown at you,
I'll just take more and more and more and more.
Speaker 2 (06:06):
And the idea that.
Speaker 3 (06:07):
Someone's going to give you a loan that you shouldn't take,
it's a little hard to get your mind around that.
You're thinking, like, well, if they're lending it to me,
they know what they're doing. You know that I should
It means I should do it. So my first reaction
when I started to hear the story of the subprime
crisis back when I was working on the Big Short
was like, well, you know, people shouldn't borrow money they
(06:29):
can't repay. It was less sympathetic. The more I dug
into it, the more predatory it all felt. And that's
not to let everybody off the hook. But you were
right to be outraged by.
Speaker 2 (06:40):
Your friend's behavior.
Speaker 3 (06:41):
It was just where high finance met the working class,
that border, where someone was who understood these things was
actually peddling them to someone who didn't.
Speaker 2 (06:53):
Was maybe the ugliest part of the whole event.
Speaker 1 (06:57):
So what I was going to say was, if you like,
let's say we went back to two thousand and six
leading up to two thousand and eight, as if I
was like a five year old, what are some indicators
that we could see as like normal people that were
heading towards this crash in two thousand and eight.
Speaker 3 (07:11):
It's funny I asked the same question of all my
characters back in the day, and just recently re asked
them for the podcast I'm doing alongside The Big Short,
And I said just that.
Speaker 2 (07:24):
I actually said, like an eight year old or a
seven year old.
Speaker 3 (07:26):
And Steve Eisman, who was played by Steve Steve Correll
in the movie, looked at me. He said, you can't
explain this to a five year old, He said, you
can explain this to I, haven't we start with.
Speaker 2 (07:36):
A twenty year old?
Speaker 1 (07:37):
Yeah?
Speaker 2 (07:38):
Fine, great, but okay, no, I'll do my Yeah. So
five year old's a little rough. But can can we
be a little older? Yeah? Please? Can me a little older?
Speaker 1 (07:45):
You picked the age twenties.
Speaker 3 (07:46):
I'll pick the age, but I'll just try My mother
an eighty eight year old. So what happens here? Your
friend was selling subprime mortgages, and which is a weird idea, right,
you have to get your mind around that. He's run
around looking for people who probably shouldn't borrow the money
to borrow the money to buy a house. And your
friend is only doing that because your friend is not
(08:06):
going to sit there with the loan. Your friend isn't
lending you that person the money himself. He's not going
to sit there. He's going to lose any money if
if those that person eventually defaults, as they turned out
likely to do. So what your friend is doing is
acting on behalf of some bigger mortgage lender who will
(08:27):
then take the loans and hand them off to I
mean there'll be sometimes multiple stages, but a big Wall
Street firm eventually and a city group, a merrill lynch,
a goldman's axe who will put them all in a
big pot. All these loans and the pot you know
what's coming into that pot is mortgage payments from all
(08:50):
these people who bought the houses, and that can be
turned into a bond, you know, It's just like that
looks like a bond, so they can sell it off
as pieces of paper in this pool of mortgages. Now
who ends up owning it? That at the time was
one of the great mysteries. This stuff went all over
the world, and in fact, some of the big Wall
Street banks end up keeping a lot of it on
(09:10):
their books stupidly.
Speaker 2 (09:12):
But along the way.
Speaker 3 (09:13):
The big point is the person making the loan is
not exposed in any way. The person's physically doing it.
They have no incentive for the loan to be a
smart loan, incentive to generate as many of the loans
as possible. They also have an incentive because these loans,
you know, the general characteristics of the loan are evaluated
by the people who are taking the loans off the
(09:33):
hands of that person who lent the money. So the
fight the credit scores. How much money do they put down?
All that stuff they would make a loan riskier or
less risky. They have an incentive to lie about that
or game it in some way. So what happens there's
a chain. This loan gets passed through several hands and
(09:55):
eventually ends up being held by some investor in the
form of a bond. But along the way, in various ways,
the risk gets disguised, and along the way it gets
packaged into these big and big black boxes, and the
boxes get harder and harder to see inside of, so
that it takes superhuman sort of analytical research diligence to
(10:22):
figure out what the hell of the loans are behind
the bonds, and that in fact, the characters are the
big short one of them. Anyway, you know, he distinguished
himself of actually going into the black box and seeing,
oh my god, there's a stripper. There's a stripper in
Las Vegas with twenty seven houses. You know, it's that
kind of thing. So what makes it possible is one
(10:43):
the neediness at the bottom of the chain, the neediness
of the person who is borrowing the money in.
Speaker 2 (10:47):
The first place, the desires.
Speaker 3 (10:50):
As one of my characters put it, this market was
totally a reflection of the working class Americans inability to
live up to their expectations, and financial expectation is that
their salaries were not meeting and.
Speaker 2 (11:02):
This sort of filled the hole, so it starts there.
Then it's like your.
Speaker 3 (11:06):
Friends immorality, willingness to to exploit, to make these loans
people wh shouldn't have them, the willingness of the whole
financial system, the big banks to disguise the risk in
the loans and their ability is subsequently to pedal these
loans in the form of bonds to like German investors.
Speaker 1 (11:25):
That's what you mean when you say stuff went all
over the world.
Speaker 3 (11:28):
It went all over the world. And part of the
reason there's a crisis is that no one knows how
much of it there is or who's got it. So
it's like you can't nobody trust anybody at that moment.
Speaker 2 (11:40):
It's like, are you bankrupt too? Are you not?
Speaker 1 (11:43):
A big date when Lehman Brothers went bankrupt was September fifteenth,
two thousand and eight. For somebody who does what you do, like,
is that a date where you remember what you were doing,
remember what you were thinking, or did things follow that
showed you the gravity of that day.
Speaker 2 (12:00):
I was already into the book I was.
Speaker 3 (12:04):
I was already reporting the big short when bear Stearns
went down in whatever February. I didn't remember the dates.
I locked in on it. I started to kind of
kick around and talk to people. I can't remember where
I was when Lehman went down. And you know what's
funny is not only can I not remember where I was,
I remember vividly where my characters were, who I cared about.
(12:27):
I started to live this through my characters. And there
was a scene that I thought was going to end
the movie, and it ended the book where these characters
there were. The firm was called Front Point Partners. It
was an obscure hedge fund that mainly traded in stocks.
Had figured out that all the Wall Street firms were
making this mistake and made this big bet against the
(12:47):
subprime mortgage market. And they were so disoriented by being
proved so right that it wasn't just they were going
to get rich, but maybe the whole world was going
to come down, Like it was just a little unclear
at that moment whether you know, capitalism was going to survive.
Speaker 2 (13:07):
Kind of thing. It was that it felt that dire
to them.
Speaker 3 (13:11):
They were so aware of just how badly behaved the
financial system had been. They imagined a cataclysm even greater
than the one that occurred, and.
Speaker 2 (13:20):
They all wandered the streets. There were four of them.
They wandered the streets of Manhattan and converged on.
Speaker 3 (13:24):
Saint Patrick's Cathedral and sat on the steps and just
watched the people like they were ghosts, passing them by,
and say, those people do not know what's about to
hit them. So when I think about that day, I
wasn't there. You know, they just told me about this.
It's their experience that pops to mind.
Speaker 1 (13:40):
What was the result of that financial crash for people
in your lives? Like I obviously know this guy who
was selling some mortgages, and I had friends who you know,
lost money in retirement or money that they had saved
up for their kids college. But did any of your
neighbor's friend's family lose jobs houses? Did you see anyone
(14:01):
on the news that you knew that you were researching?
Like what was that impact like for you?
Speaker 3 (14:07):
But you know what actually popstimized nothing that I was.
So I was reading the news of other people's people.
I didn't know their tragedies. It wasn't hard to imagine them.
I had old colleagues on Wall Street whose careers went
up in flames and in some cases kind of unjustifiably,
you know, it was a funny thing I worked. I
(14:28):
worked at Solomon Brothers in the nineteen eighties, you know,
in the Stone Age, but that as it happened.
Speaker 2 (14:33):
This is one of the reasons I got I took
an interest in the story.
Speaker 3 (14:37):
Is I was there basically when the mortgage bond market
was being invented by Solomon Brothers.
Speaker 2 (14:42):
Uh huh.
Speaker 3 (14:43):
So I saw, you know, Frankenstein's monster be created, and
now I was watching the monster come back and eat everybody,
and the people who had created the monster knew what
the monster was capable of.
Speaker 1 (14:54):
Were everyone's reactions like that? Like, I assume you called
a lot of these people up, like the idea of that,
oh shit, we were the ones that created this. Was
that across the board or or by the way, is
this truly one of those like there are five puppeteers
at the top type of situation and they're acknowledging it,
but everybody at the deputy level is pretending they had
nothing to do with it.
Speaker 2 (15:14):
So here's the weird thing. Maybe it's not so weird.
Speaker 3 (15:17):
You know how it's easy to confess to something that
you actually didn't. It's not that damning to confess to
Oh I work too hard. Oh, I care too much,
my biggest too, I loved you, I love too well,
it's not quite that. But no one was going to
prosecute Louis Ranieri for creating the mortgage bond. No one
was going to no one was probably going to completely
(15:38):
buy he was really responsible for someone taking the mortgage
bond and doing awful things with it.
Speaker 2 (15:44):
So there's something a little disingenuous about taking.
Speaker 3 (15:47):
The blame for the whole thing when you're not to.
And the people who were to blame this answer your question.
They were people inside the Wall Street firms in two
thousand and six to two thousand and eight who really
really should have taken the blame. And none of those
people got up and said, oh I'm sorry.
Speaker 1 (16:06):
No for any of them, Right, you just said nobody's
nobody's going after that that top guy. But for any
of them, the top guy or anybody in the middle,
did they actually technically do anything illegal.
Speaker 2 (16:17):
It's a really good question.
Speaker 3 (16:19):
And I have a friend, the writer Michael Kinsley, who
always says the scandal isn't what's illegal, it's what's legal.
A large part of the story of the crisis is
it's scandalous how much of this was legal, Like how
much you could define print got you off the hook
because it was immoral. It's you know, the idea that
for example, Goldman Sachs could conspire with John Paulson, short
(16:42):
seller who wanted to bet against subprime mortgages, to create
billions and billions of dollars of side bets on the
very worst mortgage bonds they created, so so so paulse
could bet they were going to go bad. And these
are just like it's just like it's a you can
think of it as like replicating the worst loans to
infinity and injecting those things into the financial system. So
(17:06):
getting other people Germans or whoever to take the other
side of that bet.
Speaker 2 (17:11):
Now maybe that's legal, it is legal. It's horrible.
Speaker 3 (17:14):
It's like because you're essentially introducing pollution, are a poison
into the financial system, and so you can take a
little profit off of it.
Speaker 2 (17:23):
People who know more than I do would tell you
that people.
Speaker 3 (17:27):
In firms hid or ignored reports of how bad.
Speaker 2 (17:32):
The mortgages were so no one would know.
Speaker 3 (17:35):
So that, you know, is that fraud. Maybe you could
get people on fraud. It was hard if you go
if you rewind the tape at the very beginning.
Speaker 2 (17:44):
You may not.
Speaker 3 (17:45):
You know, I don't know sure this is even in
the book, and my memory of it is going to
be a little fuzzy. But bear Sterns had a fund
that was attached to bear Sterns that went down, and
it went down because they.
Speaker 2 (17:56):
Were actually they owned a lot of this stuff.
Speaker 3 (18:00):
US prosecutors tried to put the people who ran that
fund in jail, and the trial was in New Jersey
and this was early early financial crisis, and not only
did they fail, but the jur there were jurors quoted
in the newspaper afterwards saying, can you get me the
number of those guys from barristers? I wanted them to
(18:23):
I think have I wanted to invest my money for.
So there was such a there was such a There
was such an at the very beginning, they were prosecutors
who were embarrassed trying to kind of like prosecute this thing,
and it was hard, it was so complicated. So the
answer is, I don't I'm sure people broke the law. Basically,
(18:45):
no one went to jail. In retrospect, the whole society
would have been better off if they've been at least
an attempt to prosecute the very topic there wasn't.
Speaker 1 (19:01):
Yeah, so then if there was no attempt made to
prosecute and it sounds like if you know, okay, you
did all these fifty things wrong that caused this massive,
awful global collapse, but technically the only thing we could
get you on is fraud, then that makes me wonder
all of the conversations about how fragile the economy is
again today, are there systems in place to prevent another
(19:24):
crash in the way you just described it? And if so,
what are they? What are they responsible for? Putting a
check in? And it did the current administration dissolve any
of them? Like did they exist post two thousand and eight?
But then over the political spectrum have they been kind
of watered down themselves?
Speaker 3 (19:42):
So there is a deathless problem in the financial system always,
and it gets worse the more complicated it gets, and
the financial system gets it's more and more complicated, And
the problem is that people get paid more to take
more risk, and the best way to get paid more
for taking more risk is disguise the risk you're taken
(20:02):
and not actually take the risk yourself. The system is
always looking to hide the risk. So part one of
the answers to you this question you just asked, is so, yes,
things that systems were put in place, constraints were put
in place, and specifically the banks were neutered. They can't
take the same kind of risk that those banks, you know,
(20:24):
City Group, Maryland, Morgan Stanley, Bank of America, that they
have more capital and they're not allowed to roll the
bones in the way they roll the bones way back
when they're much more boring. Places they themselves are unlikely
to be the place where the risk gets hidden.
Speaker 2 (20:42):
However, the risk still wants to be taken.
Speaker 1 (20:44):
Yeah, and I feel like they know the people taking
the risk.
Speaker 3 (20:46):
And yeah, they know the people getting the risk, and
they're getting more and more involved. The place where the
risk is being taken are places that you maybe or
even just barely conscious of.
Speaker 2 (20:56):
The place is called Apollo and Blackstone.
Speaker 1 (21:00):
These are all private equity.
Speaker 3 (21:02):
They're all private so they're all they're all way outside
regulatory framework that top stops the banks from So it's
like you squeeze the orange and the juice went outside,
and the juices outside and it's floating or it's sloshing
around and it's hard to know.
Speaker 2 (21:20):
I mean I had someone tell me the other day.
I mean someone who.
Speaker 3 (21:24):
Watches these places closely that Blackstone areas Apollo, who are
now making they have trillions of dollars and loans they're
making there used to be That's not what they used
to do, the especially doing banking outside the banking system,
told me that they've these are the institutions that are
now too big to fail.
Speaker 2 (21:42):
By too big to fail.
Speaker 3 (21:43):
I mean that if they were to fail, the government
would come in and backstop them so that anybody who's
got money in them won't lose their money. And we
don't know exactly how it's going to go down, but
the risk that they're terrified of is that it's the
financial next oneancial crisis starts there. I do not know
if that's true. Uh huh, I just I do know that,
(22:05):
you know, people follow their incentives in the financial system,
and if you can find ways to get paid short
term for taking.
Speaker 2 (22:11):
A lot of risk that won't go bad for a while,
people will do that.
Speaker 3 (22:15):
And the risk goes bad when the risk goes bad,
and between now and then, people make a lot of money.
Speaker 2 (22:21):
I mean, this is why these things go in cycles.
Speaker 3 (22:23):
It's partly memory and partly it takes a little while
for the financial system to figure out how to hide
the risk again.
Speaker 1 (22:28):
But so if people are making money in the short term,
then who's losing money in the long term when something.
Speaker 3 (22:34):
Collapses, Well, if the collapse occurs in an institution that's
too big to vail, the first approximation is the taxpayer
their government comes in. It's more complicated than that. Let's
take a single simple example. There was a trader at
Morgan Stanley in the run up to the financial crisis
who I think was paid fifty million dollars in bonuses
(22:57):
for his supposedly clever trades in the subprime mortgage more
he was effectively long in the market, effectually owns subprime
mortgage bonds.
Speaker 2 (23:05):
More complicated than that, but roughly so.
Speaker 3 (23:08):
When his trades go bad and Morgan Stanley loses on
his trades ten billion dollars, first place, it's Morgan Stanley's shareholders.
Second place, it's any taxpayer of funds that come in
to bail out Morgan Stanley. But he never got he
never had to give his bonus back.
Speaker 1 (23:24):
That's crazy.
Speaker 3 (23:26):
It's crazy. So it's crazy. So that's the problem. Where's
the in New Jersey where they all.
Speaker 1 (23:31):
Go to see? This is what did I say when
I opened? I knew plenty of people growing up who
were who were shady as hell, and it wasn't just
the mafia ties.
Speaker 2 (23:40):
No, you got to you got to find all us
in New Jersey. Yeah. New Jersey's is filled with characters.
Speaker 1 (23:45):
That's a very diplomatic way of putting here.
Speaker 3 (23:47):
Probably gambling on sports. I don't know what he's doing,
So they're just The problem is incentives. People follow their incentives,
and a really complicated system starts to generate screwed up
incentives and people do screwed up things.
Speaker 1 (24:00):
Can I just want to very simply try to recap
something that you said to make sure I understood it
properly that I was curious what laws have changed to
make sure that the same thing doesn't happen as what
happened in two thousand and eight. And you're saying that
all of the risk then went to private equity, which
(24:20):
means there's zero oversight. So we've collectively decided as a
society that instead of putting proper checks and balances to
prevent the system from repeating those mistakes, we're just going
to make it so that nobody can see what those
mistakes are. Is that correct?
Speaker 2 (24:36):
That's not a bad way of putting it.
Speaker 1 (24:38):
That's fucking crazy.
Speaker 3 (24:40):
It's it's a little more complicated than that. It wasn't
just it's not just private equity, but it is true.
It is crazy. On the other hand, let me argue
against myself a moment.
Speaker 2 (24:51):
Well, I do think.
Speaker 3 (24:53):
Where this all starts for me, where the financial crisis starts,
is when these bank these investment banks, acts and Solomon
Brothers and Morgan Stanley and so on in the eighties
and early nineties go from being private partnerships to being
public corporations. Because it is true that when they're private partnerships,
(25:14):
the people who own them are the employees, and it's
they're exposed. They don't want to do really stupid things
when they're exposed.
Speaker 1 (25:22):
They're exposed in what way?
Speaker 2 (25:23):
What does that mean?
Speaker 3 (25:24):
Well, so if Lehman Brothers when it went down, had
not been a public corporation, it had been back what
it used to be, it was owned by the employees,
all those you know, Dick Fold and all the people
who own ran that place, would have not only lost
all the money in the place they would lost their houses.
You know, they would have been they would have had
unlimited liability for the things that happened there.
Speaker 2 (25:46):
They wouldn't have behaved that way.
Speaker 3 (25:48):
They wouldn't have taken this risk, this catastrophic risk for
short term return, because they knew that when the catastrophic risk,
they would have sensed it. When things went bad, they
were on the hook. So I do like that structure,
and that structure in some ways, I think Wall Street
has been remoralized in that jump trading in Jane Street
(26:09):
and Citadel. These are all private companies and if they
go bad, if they do really stupid things, the people
who run them are going to feel a lot of pain.
So I think they'll behave more intelligently. The big private
equity firms, I think most of them are there are
their public companies, so we in that case, So the
ones who are doing all this banking, this kind of
(26:30):
I don't know what you call it shadow banking or
whatever you call it, they're actually making the loans and
trillions of dollars loans. They have the same problem as
the old banks did going to the financial crisis, and
it is essentially, you know, one there's a phrase that
people use on Wall Street, regulatory arbitrage, which just means
moving the risk to places where the regulators.
Speaker 2 (26:51):
Can't see it. Geez the word for it. And so yeah,
so I mean that's that's what's going on. That's what's
going on.
Speaker 1 (27:00):
Does this moment that we're living in, like right now,
does that feel different than any of the other moments
that we've lived through or are people always scared that
we're headed towards a financial crash?
Speaker 2 (27:13):
You know, it's funny.
Speaker 3 (27:13):
I don't live my life in fear of a financial crash,
so I'm not thinking, oh, it's always this way.
Speaker 1 (27:19):
But because you have gold under your bed, well.
Speaker 2 (27:22):
Yeah, I actually do a little bit, just a little bit.
But the it's it always.
Speaker 3 (27:28):
Feels different, right What feels different now to me is
in an alarming way. The reason we endured the financial
crisis without social collapse, without depression, without thirty percent unemployment,
without like political chaos, all the rest was we had
(27:48):
these institutions, the Federal Reserve, the Treasury, Federal Reserve especially,
and the independence of the Federal Reserve, its ability to
be the grown up in the room. And I used
that with this word carefully, but the trusted institution. No
one really doubted in two thousand and eight that the
federal government, the US federal government had the wherewithal to
(28:12):
backstop all the risk, to come in and say, all
these banks made all these shitty loans. They're all going
to go to business, but we're going to be able
at the banks. So the banks are going to be
calmed down. Everybody, don't pull your money out of the banks.
The banks can continue to do their business as they
always do their business.
Speaker 2 (28:27):
We're good for it.
Speaker 3 (28:28):
And the Federal Reserve bought trillions of dollars of mortgages,
you know, they took the loans off the books of
the banks. Turns out they made a lot of money
doing it. I mean they bought them at distress prices,
so it all worked out. But the premise of this
whole resolution was the existence of a trusted grown up
(28:48):
whose credit no one doubted. We are now in a
situation where we have an administration that is dying to
get its hand on the Federal Reserve and essentially eliminate
all trust in it, which is what will happen if
they get their hands on it, like make it politicize
the institution and our federal government's finances seem uncontrollable, and
(29:10):
so what happens if there's a financial crisis without a
trusted adult's that's what feels different.
Speaker 2 (29:17):
Like if people run.
Speaker 3 (29:18):
For gold or bitcoin or whatever, the next time things
start collapsing, will the promise of the US government to
bail everybody out stop them? Like say, oh, okay, I
believe that, Yeah, yeah, I do want hold these dollars
that you're going to print gazillions more of. Yeah, yeah,
I really do believe the Federal Reserve is going to
(29:40):
is to calm everything down. And I just I just,
you know, it's it's not we've reached a point where
those institutions can't function, but they've been really weakened. And
I just don't know how a financial crisis plays out
without an institution that you trust.
Speaker 1 (30:01):
The trust part of it, I'm so curious about. I
think about this a lot also, not just by the
way government institutions, but all of these legacy institutions that
I think people are questioning, right, your newspaper, your you know,
I'm a biased artist, First Amendment advocate all of the
everything from you know, Biden and Harris's crackdown on college
(30:22):
campuses for free speech, right up to Jimmy Kimmel getting
taken off the air for free speech. Like there are many,
many multifaceted sides to that conversation, but a lot of
it distills down into do we trust ABC and Disney?
Do we trust the New York Times?
Speaker 2 (30:37):
Yeah?
Speaker 1 (30:38):
What are we trusting these institutions? So it's not just government.
So I'm curious, like when you wake up every morning,
where do you go for your information? Who do you trust?
Who do you trust with your money? Like the like
you know gold jokes aside, are you in residential? Are you?
Speaker 3 (30:53):
It wasn't a joke for me too? No, I know,
So I will tell you. I'll tell you what do
I do? How do I live this way? Where do
I place my trust? I do not share Americans seemingly
complete distrust of media. It is amazing how untrusted the
media is in our country right now.
Speaker 2 (31:14):
I've written for the New York Times and the New
Yorker and.
Speaker 3 (31:18):
All these places, and I know there are referees who
are there to make sure you're not just making stuff up,
you know, And having said that, this is an important point.
I can remember when I first became aware of the news.
I mean, like it as a thing that you just
(31:40):
didn't take on faith. And it was when I was
at Solomon Brothers when all of a sudden I was
doing something that was in the news. I was in
the Solomon Brothers training program and a New York Times
magazine writer came through and wrote about our training program.
Speaker 2 (31:53):
And then I was twenty three or years old.
Speaker 3 (31:56):
I was, you know, basically a kid, and I looked
at and I thought, well, it's not it's.
Speaker 2 (32:00):
Not completely wrong when she wrote. But it was like
it wasn't completely right. She missed it shouldn't have it. It
wasn't that she had an angle. It was just that
she didn't know very much. You know. She was there
and talked to a couple of people.
Speaker 3 (32:12):
So then a penny drop for me, Well, if this
is true of something I know about, what about all
these things.
Speaker 2 (32:19):
I don't know about.
Speaker 3 (32:20):
If I'm reading about the Arab Israeli conflict, what's the
likelihood that they've got that anymore?
Speaker 2 (32:25):
Right?
Speaker 3 (32:26):
And so assume the persons more or less trying to
do their best and has some bias, and sometimes they
reveal their bias, but mainly it's just like the nature
of news gathering is pretty shallow, so how getting out
of How do I live my life? So I hold
it all kind of loosely.
Speaker 2 (32:40):
But I read the New York Times. I glance at
the Washington Post. I read the Wall Street.
Speaker 3 (32:46):
Journal, you know, very useful to me because it's coming
from a completely different spaces.
Speaker 2 (32:50):
The Financial Times they just sort of like they're Switzerland.
Speaker 3 (32:54):
They don't they like they're looking at what's going on
in America, like they're looking at Mars.
Speaker 2 (32:59):
And that's very helpful. So those are newspapers.
Speaker 3 (33:02):
I let all kinds of podcasts and stuff in I graze,
I get more, more sources, less deeply. In the last
ten years, I've not read the New York Times as
deeply as I read the New York Times twenty years ago.
Speaker 1 (33:16):
And it's much shorter now anyway.
Speaker 2 (33:19):
And my money where I do? Where do I keep money?
Speaker 1 (33:22):
Where do you keep your money? So who do you trust?
Speaker 3 (33:25):
Schwab huh very important. They don't take big positions themselves.
They were notably like they were not in trouble during
the financial crisis. JP Morgan, As I figure that in fact,
I don't know. I got to say I don't understand why.
Speaker 2 (33:41):
Anybody keeps more than you know.
Speaker 3 (33:43):
Whatever the deposit insurance now is at a local bank,
at a regional bank. It's their handful of banks that
are implicitly federally guaranteed, like too big to Fail, and JB.
Morgan is the biggest and the best run and a
little bit out of the country, like not a lot,
but a little bit out of the country. And that's
a I lived in London when I started my writing career,
(34:05):
and so I had to have a bank account.
Speaker 2 (34:06):
I just kept that bank account in London.
Speaker 1 (34:08):
Oh cool, Okay.
Speaker 3 (34:10):
But what I invest in in my weak moments, I
will very occasionally buy a stock of a company, of
an actual company.
Speaker 2 (34:19):
It's almost always a mistake.
Speaker 3 (34:21):
I get lucky and don't I never know enough to
actually I know, I know, I don't know more than
the market and I and I get excited about something
and I ignore the fact that I don't know. Mainly
index funds and Berkshire Hathaway, which is a kind of
index fund.
Speaker 2 (34:35):
It's a big fund. And then gold.
Speaker 3 (34:38):
So I have a friend who runs money, who was
a high school friend. He became a libertarian, he became
an iron Randian. I lost track of him until the
financial crisis. I heard he was working for bear Stearns.
I was worried about him. I call him up and
he's got this excited tone of his voice, even though
I haven't talked in twenty years.
Speaker 2 (34:57):
It's like we was yesterday. It goes, Michael, Mike, I can't talk.
Speaker 3 (34:59):
I'm and I said, I'm just worried about you, and
he goes, no, no, no, I'm sure he had a fund
outside of Bear that bear Stearns funded, and he made
the big short. He made the trade, and he gave
me a little lecture ten years ago about the debasement
of the currency and the history of currency debasement, and
it so spooked me that I just thought, Okay, I'm
gonna buy some gold. So I actually bought some gold,
(35:22):
and it's gone up and up and up. And I
can't recommend it really, except that.
Speaker 1 (35:29):
It's worked for people who are listening. Why specifically gold
because your friend told you to or because there was
something else.
Speaker 3 (35:37):
So the argument is gold has no intrint really, it's
not worth thirty six hundred dollars.
Speaker 2 (35:42):
Announced it's use value.
Speaker 3 (35:45):
The argument is it has social trust. You can't explain
why or how it got this, but it is ingrained
in us, in human beings, to believe this thing is
valuable and to run to it when all else doesn't work,
and every he agrees to do it, even if they
aren't conscious of it. And so when things go really bad,
(36:06):
it's going to go up. And there's saying why you.
I mean, it's just it's got a history. But I
do feel I got to say, I don't feel completely
comfortable with my holding. I bought into this idea that
my friend sold me, sold me over an afternoon.
Speaker 2 (36:23):
I thought.
Speaker 3 (36:24):
Part of what I was thinking is will be a
fun way to keep in touch with him, is I'll
buy some of it and we will be talking about it.
And then it just started going up so fast I
forgot about my friend and thought about, wow, I.
Speaker 2 (36:34):
Got a bunch of gold. So that's what happened.
Speaker 1 (36:39):
I'm going to ask you a couple of rapid fire
trust questions. Do you trust the following?
Speaker 2 (36:43):
Can we do one to ten? Or is it yes
or not?
Speaker 1 (36:45):
Sure? You could do one to ten? Yeah, one of
ten's great. Do you trust the front page of the
New York Times?
Speaker 2 (36:51):
Eight? The front page?
Speaker 3 (36:53):
Yeah, I mean the New York Times generally eight seven
and a half eight. In these times, people have been
run out of New York Times for being wrong thinking
in the last ten years. You can't you know the
James Bennett episode.
Speaker 2 (37:05):
That kind of stuff.
Speaker 3 (37:06):
Printing something that offended other people gets people fired.
Speaker 2 (37:10):
That's outrageous. So that that is that has caused my
trust in the New York Times to decline.
Speaker 1 (37:16):
That's well said. Okay, what about the front page of
the New York Times style section.
Speaker 2 (37:20):
Ah, that's stuff. That's ten baby, there it is.
Speaker 3 (37:23):
And by the way, ten being in the most asked me,
it doesn't really ask me to trust it.
Speaker 1 (37:28):
It's critical for an idiot like me who has no
sense of style and is trying to learn because I.
Speaker 2 (37:32):
Trust, don't do that.
Speaker 3 (37:34):
Don't do not figure out which colored T shirt to
wear or whether you can wear shorts in the winter
from you.
Speaker 2 (37:40):
Don't don't do that.
Speaker 1 (37:41):
Okay, Street tacos in Los Angeles four Ooh, hard to start.
Speaker 3 (37:48):
I have a very sensitive stomach and I've had some
bad experiences.
Speaker 1 (37:51):
Okay, that's fair. I would do I would do it
in an eight point five or nine. But if it's a
stomach issue, I.
Speaker 2 (37:55):
Get it's a stomach issue.
Speaker 1 (37:57):
Okay, then let's move on to hot dogs. Hot dogs
at Yankee Stadium.
Speaker 2 (38:00):
Oh god, five, I'm sorry.
Speaker 3 (38:03):
It's and it's just and it's it's also just like,
as I've gotten older, the appeal of the hot dog
has declined, and it's declining.
Speaker 2 (38:10):
It won't it's asymptotically. I don't think it will go
to zero.
Speaker 3 (38:14):
But it went from oh, this is a natural thing
that a human being should eat to I really I
feel the same way about pop tarts.
Speaker 2 (38:21):
Like if if if like someone from.
Speaker 3 (38:24):
Outer green little green man from outer space, came down
and stared at this thing, would he yet identify it
as a food? And it probably not? And there's probably
a good reason for that.
Speaker 1 (38:35):
Okay, social security.
Speaker 3 (38:40):
A six and a half seven, and that is just
it's going to be inflated away.
Speaker 2 (38:46):
I mean, the value of that. I think the value
of the benefits will be eroded.
Speaker 3 (38:51):
I don't think the population will put up with it
just being taken away, because people have it in their
head as I paid for this, that's my money. It
just so, I mean, you can print, always print more dollars,
so we'll get some of.
Speaker 2 (39:05):
It, but not what you'd hope for.
Speaker 1 (39:08):
Congress.
Speaker 2 (39:10):
I mean, I got to ask trust to do what.
Speaker 3 (39:13):
I mean, I could ten in some ways in one
another is it's here's the conundrum, the thing that I
can't get out of my head about Congress. If you
go in and spend time with the individuals, as I've
actually i've done recently, I always come away feeling good
about the people. I always come away feeling bad about
their circumstances, like the situation.
Speaker 2 (39:36):
And so I come.
Speaker 3 (39:36):
Away thinking, it isn't the actual people we're putting in
there that's the problem. It's the situation we put them in.
So the things about the structure of the institution that
are catastrophically bad. So I actually kind of trust the people,
like when I meet them and spend time with them,
but I know that the institution is going to end
(39:57):
up in a not a good place.
Speaker 2 (39:59):
So anyway to ten, if you put this to the
American public, you get a one.
Speaker 1 (40:03):
Yeah, three, Okay, Well my last my last two trust
things were gold and you're weed guy, And I know
how you feel about gold.
Speaker 2 (40:13):
You know I gold eight. But my we guy.
Speaker 3 (40:17):
So I have never taken a single hit. I never
I've never even tried marijuana, and you just do edibles. Eventually,
I'll probably come around edibles. Friends tell me like they'll
change my life, but I have not, so I don't
have a view of my we guy. All right, So
(40:37):
there's a level, not a we guy. So I default
to trust. So we'll say ten. I trust my week
guy ten.
Speaker 2 (40:44):
Because it cost me. It costs me nothing to trust him.
Speaker 1 (40:47):
Awesome, Thank you for your time, Michael, all Right, totally fun.
Here we go again as a production of iHeart Podcasts
and snap Fu Media in association with New Metric Media.
Executive producers are me Calpen ed Helms, Mike Falbo, Melissa Martino,
Andy Kim, Pat Kelly, Chris Kelly, and Dylan Fagan. Meghan
(41:08):
tan Is our producer and writer. Dave Shumka is our
producer and editor. Our consulting producer is Romin Borsolino. Tory
Smith is our associate producer. Theme music by Chris Kelly,
logo by Matt Gosson, Legal review from Daniel Welsh, Caroline
Johnson and Megan Halson. Special thanks to Glenn Bassner, Isaac Dunham,
Adam Horn, Lane Klein, and everyone at iHeart Podcasts, but
(41:31):
especially Will Pearson, Carrie Lieberman and Nikki Etour. Thanks for listening. Everybody,
tell your friends, write a review. All of this helps.
I appreciate you listening, and until we go again, I'm
Calpen
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