October 13, 2025 • 40 mins
Almost everyone is talking about us possibly being in a bubble. Regardless of how AI investment ultimately pan out, there is an incredible amount of retail speculative mania in the air. So, how does this environment compare to past periods of exuberance? On this episode, we speak with Andrew Ross Sorkin, the editor of Dealbook, the co-host of CNBC's Squawk Box, and the author of the new book 1929: Inside the Greatest Crash in Wall Street History--and How It Shattered a Nation. Sorkin, who previously wrote Too Big to Fail (chronicling the Great Financial Crisis of 2008), went into the archives to discover just how in thrall the American public was to the market on the eve of the great crash. We discuss lessons from the time, similarities, and differences.
Read more:
Companies Overpaying for AI Add to Bubble Risks, Survey Shows
Why Circular AI Deals Among OpenAI, Nvidia, AMD Are Raising Eyebrows
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lats podcast.
Speaker 3 (00:22):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2 (00:24):
Tracy, It's been a theme in a lot of our
episodes lately, but we are in an age where trading
and speculation it's just part of the culture. We know
that stocks are up, we know that a lot of
things are up, but that's different than it being part
of pop culture, which it is now.
Speaker 3 (00:38):
It's a culture of lines, lines going up. People watch
the lines.
Speaker 2 (00:42):
I really think that if you're walking down the street
or on the subway and you see like a guy
staring at there's a good chance that he's like looking
at it.
Speaker 3 (00:49):
A bitcoin bitcoin shart.
Speaker 2 (00:50):
Yeah, yeah, any given moment.
Speaker 3 (00:52):
Well, this was one of the things about bitcoin. It
was so volatile, there was actually something to watch. There's
like an entertainment factor. But of course when you get
this kind of speculative activity, everyone starts worrying about when's
it going to end or when's the crash.
Speaker 2 (01:07):
I have this theory that nobody likes bubbles, and that
basically if there is a bubble, there's two camps of people.
One camp that is really upset that they're missing out
on it, and one camp that is really anxious that
they're going to miss the top, and that there are
actually very few people in the camp where it's like, oh,
this is like really good, I'm really happy.
Speaker 3 (01:24):
I'm really The people who nail the timing are pretty
pleased with themselves, I assume.
Speaker 2 (01:29):
And there's like five of those people, you know, like
that's the problem. Afterwards, always like I sold the top.
Speaker 4 (01:33):
I feel good.
Speaker 3 (01:34):
Yeah, absolutely, Okay, So famous crashes, we're going to talk
about one of them.
Speaker 2 (01:38):
You know, I remember the dot com era very well.
I don't remember the market environment.
Speaker 3 (01:43):
We're going to talk about the nineteen twenties. You have
no memory of that. Shame on you.
Speaker 2 (01:48):
I don't remember nineteen twenty nine very well. I did
read John Kenneth Galbray's famous book, The Great Crash, But
there's a new book out on the great stock market
boom and then crash of nineteen twenty nine. We are
going to be speaking with the author, someone I'm thrilled
to talk to, someone who's accomplishments and work ethic puts
us all to shame. We're going to be speaking with
the one and only Andrew Rasorkin, founder of Deal Book
(02:10):
at New York Times, co creator of Billions, co host
of Some squawk Box the NBC. I made that joke
with a Jim Cameron, as if I'd never heard the
network and now the author of nineteen twenty nine Inside
the greatest crash in history and how it shattered a nation. Andrew,
thank you so much for coming on odd Laws, thrilled
to heavy hair.
Speaker 5 (02:29):
Thank you for having me. I feel like I'm a
longtime listener, first time caller.
Speaker 4 (02:33):
Amazing.
Speaker 3 (02:33):
Thank you.
Speaker 2 (02:34):
So this isn't the first time nineteen twenty nine has
been written about in the gall Braith book. It's probably
like that was up until now, probably the most famous.
It is a great book, right, What was the impulse
to go back and write a book about this period
of time?
Speaker 5 (02:47):
To be honest with you, it was about ten years
ago I'd written Too Big to Fail. People used to
ask me because I had written about the financial crisis
at two thousand and eight, they'd ask me questions about
nineteen twenty nine, and the.
Speaker 4 (02:59):
Truth, I didn't really have answers because I sort of knew.
Speaker 5 (03:03):
I think, like most of the public today, that something
pretty bad happened.
Speaker 4 (03:07):
Then. I had read the gull Broth book, but sort.
Speaker 5 (03:10):
Of beyond that, I was lacking details, And I honestly
I went on a vacation. It's like a nerdy vacation
thing to do. I downloaded some books to Kindle, and
I brought some more with me. All about nineteen twenty nine.
I sort of poured through them, and I thought to myself,
why can't I understand who the characters are, like the
(03:31):
people at a visceral level, like what were they saying
to each other? What were their motivations, were their incentives,
who was sleeping with who? What was really happening here?
And you know, I grew up sort of loving books
like that written by Michael Lewis or Jim Stewart.
Speaker 3 (03:49):
With Denna Feeves you mentioned A Night to Remember or A.
Speaker 5 (03:52):
Night to Remember with the Titanic was a great example
of a book that really sort of made things feel human.
And so I thought, you know what, could somebody, and
maybe it was me do that to nineteen twenty nine
and the youth was I wasn't sure I could that.
One of the reasons I think this took so long
was the entire time I wasn't sure. And when I
(04:12):
first started it, actually I mean started doing the research,
many of the archivists that I went to visit with
were like Andrew, we've read too Big to fail, that
kind of granular detail. It's just too hard to find.
And by the way, all the people are dead obviously,
so there's nobody in interview to you. You're really reliant
on letters and notes and memos and transcripts. And the
truth is, there wasn't like two or three or four
(04:33):
major archives you could sort of go excavate, and so
this turned into this sort of bizarre, years long project
of putting these puzzle pieces together.
Speaker 3 (04:45):
I can only imagine how much archival research you had
to do for this book. It is very filled with
texture and personality and lots and lots of details. Is
there a particular character that kind of stuck out to
you in this book? I've read about Charles Mitchell. He's
sort of the villain, But then towards the end of it,
(05:05):
you have a sort of more nuanced opinion.
Speaker 4 (05:08):
So I think there's a couple of characters.
Speaker 5 (05:10):
And the truth is I would also say one other thing,
because I know we'll probably end up talking about today
like modern day today. When I started writing this book,
I never even thought about today. I was thinking really
about then. I didn't think I was.
Speaker 2 (05:23):
Because if this is the top this year, you nailed
the time.
Speaker 5 (05:25):
But as I was working on this, these characters to me,
like Charlie Mitchell, who ran a bank called National City
which becomes City Group, parallels to me between him. He
effectively invented sort of modern credit for lending, if you will,
to individuals to go and buy stock. I mean to me,
(05:45):
back then, he would have been as famous as a
Jamie Diamond of today. He might have been the Michael
Milken of his time. In certain ways. He might have
been even like a Dick Fold kind of character from
Lehman Brothers. So I was fascinated with Charlie Mitchell, and
he was actually one of the hardest characters to really
write because there really is no archive. He didn't keep
his own notes. It was really dependent on actually finding
other archives of letters and things that he participated in.
(06:09):
He was on the board of the New York Fed,
and I was able to get the minutes from those
FED meetings for the first time, and that really actually
sort of grounded the project. I became fascinated by John Raskob,
who to me is like Elon Musk in the nineteen twenties,
he was everywhere all the time. Philosopher King helped run
(06:31):
General Motors, really created credit at General Motors, which really
changed America. That's actually when people started taking on credit
for the first time. Goes on to play the market,
goes on to get involved in politics. He actually tried
to undermine Hoover's reputation in sort of a Musky kind
of way, if you will, and then goes to build
(06:52):
what was then the equivalent of a spaceship in the
Empire State Building. And meanwhile, I don't know if he
gets credit for it, if he really did to some
degree come up with the idea at least or became
an advocate for a five day work week in America.
People forget there were six days back then, And he
thought it was an would be an economic boon because.
Speaker 3 (07:12):
People would have to go and spend your money.
Speaker 5 (07:14):
Go spend money, they'll buy cars, they'll have to go play,
they'll have time to go places, do all sorts. So
I thought he was fascinating. And then the last person
carter Glass carter Glass to a glass degal fame. He
was a senator in Virginia, by the way, helped create
the bill that led to the creation of the Federal Reserve.
But he was the Elizabeth Warren of his time, and
(07:36):
he used to rail for years about this thing called
Mitchellism and this idea that Charlie Mitchell and the creation
of debt and leverage in the system was what was
gonna undo it.
Speaker 4 (07:45):
The gold Brief.
Speaker 2 (07:45):
Book talks a lot about the I guess what were
they that it was before mutual funds. What were they called?
The trust?
Speaker 4 (07:50):
The investment trust, the investment trust.
Speaker 2 (07:52):
But your book talks a lot about this idea of
like retail leverage basically which were you described and you
talk about they would say, okay, we've tadd people that
they can buy a car on margin, or a car
on credit, or a dishwasher, why not a stock And
it seems like they really trans a lot of people
in industry really sort of transported this consumer notion that
(08:13):
was nascent and just like, yeah, let's pourt it over.
Speaker 5 (08:16):
I didn't appreciate that back then. I mean, brokerages were
springing up on the corners of the streets. The way
they're like Starbucks in New York.
Speaker 4 (08:22):
It was really fun.
Speaker 2 (08:23):
I always think about these physical or like the brokerage
on a cruise. Wouldn't be fun to just walk in
and play the market.
Speaker 3 (08:29):
You mentioned lounges in like hotels, women only stock trading launches,
which you know, I would go for those. Nowadays, they
don't have to be women only, but just a place.
Speaker 5 (08:39):
Every thing that was nuts, though, is you would show
up and you could give them a dollar and they
would literally lend you ten. I mean, that's what we're
talking about. And so when the market was going up,
it really was like free money. And I think this
was the first time this is ever really happening, and
so people didn't fully appreciate all the things that were possible.
Speaker 3 (09:00):
There's another parallel with today, which is a lot of
the stock market being driven by AI, right, And when
people talk about the market opportunity in AI, it's basically uncapped.
It's the entire world. It's like all of business. And
in the nineteen twenties, people were saying stocks were going
to go up because the entire world was buying into
(09:21):
the US.
Speaker 4 (09:22):
I think that's very true.
Speaker 5 (09:23):
I would actually specifically point actually to a technology story
back then, which was radio Radio. The ticker symbol was Radio,
the company was RCA. They also, by the way, not
only had the technology for radio, they had the patents
for television and that was the Nvidia. I mean, that
was the meme stock of that era, because people were
(09:45):
buying into this future that we were all going to experience,
and they wouldn't have been wrong.
Speaker 4 (09:49):
By the way.
Speaker 5 (09:51):
The conundrum is, I think the stock split adjusted at
the peak was like got to five hundred and thirty
SOMEID dollars and by nineteen thirty two was like three dollars.
Speaker 2 (10:00):
So one thing I was, you know, obviously when radio
comes to RCA, you're like, oh, it's the video of
the time. In video makes a ton of money, and
it makes more money every year. We'll see. We don't
know how sustainable that is, because some of that is
them investing in companies which come back and buy in video.
Speaker 4 (10:16):
But setting that aside vendor financing.
Speaker 2 (10:18):
Was RCA making a ton of money or was it
mostly excitement about the future. Do we have Radio's financials
from the twenties.
Speaker 5 (10:26):
So the bad news is we don't. In fact, somebody
said to me the other day, did you ever get
a chance to look at the prospectuses of these stocks.
And I said prospectuses. They hardly had leaflets. I mean,
and that's if they had anything. They literally would be
leaflets that they would handle.
Speaker 2 (10:42):
Other pes ratios going the period.
Speaker 5 (10:44):
It was very hard to get real information. Again, this
is pre the creation of the SEC. The kind of
rules and regulations and just disclosures just didn't exist in
the same way that they do today.
Speaker 3 (10:58):
So would you just get like a check in the
mail for a dividend every once in a while, Like
what access did you actually have?
Speaker 5 (11:03):
So my understanding is that you would get a check
in the mail. In fact, oftentimes they wouldn't come in
the mail. You'd actually go to the brokerage house itself,
and in some cases they would keep that for you
and sometimes either reinvest it or keep it on like
a ledger, if you will.
Speaker 4 (11:19):
But I don't know the.
Speaker 5 (11:20):
Specifics exactly of how you would deal with your dividend
when and if you got it.
Speaker 2 (11:25):
One thing I really like in the book is all
these different characters from American from world history, you telling
the story of them getting really obsessed with the stock market.
So Winston Churchill, on an early trip to the United
States gets really into margin trading. I think, like you
talk about growd show Mary and getting really insane.
Speaker 4 (11:41):
To me, that was also like a great surprise.
Speaker 2 (11:44):
That was also not something I'd read about.
Speaker 5 (11:45):
I had no idea that Winston Churchill shows up in
New York actually have been the US even before this,
But in New York in October of nineteen twentyine he
was actually down on the floor of the Stock Exchange
visiting while this was all happening. He was totally engrossed
in trading. He was trying to make mine. He ends
up losing money, of course, like everybody else. He ends
up going to a dinner with all the leading bankers
(12:06):
the night that the market completely and utterly tanks. And similarly,
I didn't know about it either. But you know, Groucho
Marx was living in Long Island, and basically I shouldn't
say he was living on island, but he was recording
to his son. He was really living at a brokerage house,
trying to retape every day, and he ends up having
to mortgages home to pay for the margin calls when
(12:28):
they called.
Speaker 3 (12:45):
Some people did make money. Going back to our intro,
very few people managed to make money, but some of
them did, and spectacular amounts. Can you talk a little
bit about Jesse Livermore.
Speaker 5 (12:55):
The great Jesse Livre. There's been a lot written about
Jesse Livermore. Just delivering more is a arter in this book.
Of course, I don't know if we should give away
the ending for those who don't know, but Jesse Liveringwore
ultimately shoots himself in the head at nineteen forty one
over at the Sherry Netherlands.
Speaker 3 (13:11):
Shooting themselves in the head.
Speaker 5 (13:12):
In this book, there's a lot of shooting, jumping out
windows and other things. But you know, Jesse was a
short seller, and he was spectacularly successful in the crash itself.
The truth was, though he had been super successful in
parts of the twenties, and then was actually quite a
failure in most of twenty seven and twenty eight and
(13:33):
twenty nine because the market kept going up and he
was almost out of business. And then he goes back
in in the fall of twenty nine and makes something
like one hundred million dollars plus. But of course, like
I think any of these sort of super emotionally complicated people,
he ultimately loses it, I mean quickly, and then you know,
(13:56):
makes makes a little bit more, loses a little bit more,
makes a little bit more, and then this is well everything.
Speaker 2 (14:02):
You said that when you started this book. It started
a decade ago, so it is not about some attempt
to make a parallel today, even though the timing may
things are very crazy these days. Many people would say,
I've always been curious about this, Chris. When I read
history of any sort, the brain can't help but try
to find parallels to the present. I think, at least
for me, it's like, oh, this is just like this,
(14:23):
just like this. When you're doing the process of writing history,
do you have any mechanisms in place to avoid the
temptation to sort of overdraw parallels, because that must be
incredibly tempting to find the details that feel salient and
similar today. This is the Nvidia of the time, This
is the Kathy word of the time, this is whatever.
Speaker 4 (14:44):
So yes and no.
Speaker 5 (14:46):
I think it wasn't until two years ago when I
was getting closer to being finished and also sort of
recognizing what was happening in the moment today, and the
parallel started to seem clearer and closer. So three and
four years ago, actually it didn't feel as similar, oddly enough.
But all of a sudden, you're starting to see these
(15:08):
debates that they're having in literally the spring of nineteen
twenty nine about whether to raise or lower interest rates,
and how they're going to try to end speculation within
the New York Fed and to some degree the political
pressures that are around them, And you start to say yourself, well,
that seems kind of I've been hearing a lot about that,
so I hesitated to sort of overdo it. But I
(15:32):
also was cognizant that I imagined readers who were reading it
might think about some of these things. And one of
the decisions we made in particular, I remember having lots
of debates with my editor about was nowhere in the
book did we ever want to stop the reader and
take you out of nineteen twentynine and say, hey, by
the way, this is kind of like that, or this
is kind of like that. Some readers may see these
(15:54):
parallels or different things themselves, some may never see them,
and some may come up with completely different parallels.
Speaker 4 (16:00):
And I would love that.
Speaker 3 (16:01):
Frankly, I have a parallel. Okay, something that happened slightly
after the crash is smoot Holly right. The tariffs, and
today we're in the Trump administration with very broad, widespread tariffs.
Speaker 5 (16:15):
Yeah, that wasn't on my bingo card when I was
writing that originally.
Speaker 3 (16:18):
I'm curious how much of the subsequent Great Depression would
you attribute to those sorts of economic policies versus the
stock market crash itself.
Speaker 5 (16:29):
So I actually think there was a lot of bad
decisions and dominoes that came after the crash itself that
really is what put us into the Great Depression. So
I look at the crash and really only the first
half of this book is about the crash itself as
sort of the first domino of a series of things
(16:51):
that were sort of the necessary ingredients to create the depression. So,
you know, when you think about all of the bad decisions,
the tariffs are one of those decisions, the idea that
Andrew Mellon, who is our Treasury secretary, who was effectively saying,
let these capitalists eat it. They were speculating, let them suffer.
(17:11):
You know, when you think about the fact that the
FED really did very little at the time and almost
sat on their hands in large part, I would argue,
because the FED was such a new institution, people forget
who was born in nineteen thirteen, that they were cognizant.
Speaker 4 (17:25):
Of the political pressures.
Speaker 5 (17:26):
If they were seen, they couldn't have pulled off a
voker like moved. They knew there were speculation, but if
they had said, Okay, we're going to really just raise
interest rates, by the way, it wasn't that we're going
to lose their jobs. I think they actually feared that
maybe there wouldn't be a FED. So I think there
was sort of the consonance of all of these different
things we talked about the gold standard. I mean, there's
sort of a series of things that take place that
(17:47):
lead eventually to nine thousand banks going out of business
and unemployment at twenty five percent.
Speaker 2 (17:53):
It's interesting speaking of the FED because these days there's
all this question of like we're looking at financial condition,
at real economy, et cetera. It's interesting how maybe the
FED didn't do enough to curb speculation, or maybe at
some point didn't do enough to counteract the downturn. But
they were very keyed into the rate on margin lending
(18:15):
as one of their main tools that they had in
their toolkit.
Speaker 4 (18:18):
So that was their big tool, or what they thought
was their.
Speaker 5 (18:21):
Tool However, they didn't really use it, and so you
had this sort of fascinating debate happening in the spring
of nineteen twenty nine, when they're sitting there saying, there's
too much speculation.
Speaker 4 (18:32):
We need to end the speculation. How do we do that?
Speaker 5 (18:35):
Well, the decision they came to, effectively was to send
out letters to banks saying, please stop lending to speculators,
to which the banker said, what are you talking about?
How you define what a speculator is? What what isn't one?
Some of the banks were so scared that they effectively
stopped lending. That, unto itself, was a problem. And then
you had people like Charlie Mitchell, who, by the way,
(18:57):
in that moment you would have compared to Donald Trump
saying actually lower interest rates please. So I think there
was this sort of fascinating dynamic that you could sort
of see play out. Again, these are some of the details.
I don't think I understood the texture of what really
led to all of this.
Speaker 3 (19:13):
There's another parallel, speaking of the FED. This might be
pressing it or stretching it a little bit, but I
get the sense that nowadays people feel that the FED
can come up with any solution to any problem.
Speaker 4 (19:26):
Right.
Speaker 3 (19:26):
We've seen them roll out tons and tons of different programs,
whether it's for corporate credit or repo treasuries, that sort
of thing. In the nineteen twenties, there was a sense
that America had beaten the boom bus cycle, right, because
there was another crash previously, which was nineteen oh seven.
Speaker 5 (19:44):
Look again, I think this is one of those things
where because of the nineteen oh seven experience, which by
the way, was solved effectively by JP Morgan taking a
bunch of bankers and trapping them in a room until
they could figure out what they were going to do,
led to a sort of sense of overconfidence, and not
just overconfidence, a sense among certain men, men of a
(20:07):
certain group, if you will, that if you could just
put the right people in a room together, we could
solve anything. Thomas Lamont was effectively running JP Morgan during
this period. JP Morgan himself had died. His son Jack
was the CEO in name, but really Thomas was running things,
and he was one of those kind of believers. But
(20:29):
I think that nineteen twenty nine and what happened in
the markets just got so far away from them that
they realized that there was nothing, ultimately in the end
they could do, and they didn't know that until Lewis
too late.
Speaker 2 (20:41):
So nineteen oh seven, literally one hundred years before our crash,
the Great financial crisis that leading to all of this
overconfidence that there is just an endless series of tools
that the government has to stop anything.
Speaker 4 (20:54):
And then we get you're making your own power. It's
how do you not? How do you?
Speaker 3 (20:58):
How can the brain?
Speaker 2 (21:00):
And I don't even like, I'm not even arguing there's
a parallel. I just think that the brain naturally sees
these things and we can't avoid it. Maybe, by the way,
we'ren't twenty five, so we still have four years.
Speaker 1 (21:10):
Four four years.
Speaker 2 (21:11):
That's not financial advice, but four years are going to
try and.
Speaker 4 (21:13):
Make my money?
Speaker 2 (21:15):
Wait, maybe this I'm gonna ask you. I don't know
if there's you may not even want to answer that.
This could be like a really good movie or TV
show on Netflix.
Speaker 3 (21:22):
Oh yeah, yes, I thought it's very.
Speaker 2 (21:24):
Guilded, gilded. Yeah I had that thought too. You gonna
can you give us a little news here?
Speaker 4 (21:28):
I don't have any news for you, you know, co
creator of Billions.
Speaker 5 (21:32):
Happily, there's a bunch of folks in Hollywood who've been
reaching out recently, and there's some conversations going on, but
no news, and I you know, one of those cross
your fingers kind we.
Speaker 2 (21:43):
Could officially say that we think it would be a
good show.
Speaker 3 (21:45):
We want cameos, we want cameos.
Speaker 5 (21:47):
We can organize that this is a period piece, so
we're gonna have to.
Speaker 3 (21:51):
I love it.
Speaker 2 (21:52):
Tracy could be the astrologer that hangs out stock tips
based about.
Speaker 5 (22:00):
That, So you're talking about Evangeline Adams. She was an
astrologer and an astrologer who was taken shockingly seriously at
that time by all sorts of financiers. Before he died.
JP Morgan himself was famous for going to visit with her.
She had an office in Carnegie Hall and she would
literally sit inside the Plaza Hotel and people would come
(22:23):
up and talk to her and visit with Jenner newsletter
and then, by the way, interestingly, in October of nineteen
twenty nine, as the market is crashing and people don't
always appreciate the crash really happened over several days. It
was not just one bad day. She would have these
almost like seances where people would come to her office,
and she wasn't doing one on ones at that point
(22:44):
because the groups were so big.
Speaker 3 (22:47):
She was summoning the animal spirits, yes.
Speaker 5 (22:49):
And she was praying for, of course, for high stock prices. Interestingly,
she got a lot of credit for the stock market
boom because in the fall of twenty nine, I think
right after Labor Day in September, a reporter called her
and asked her what was in the stars. Of course,
she told everybody that the market was going.
Speaker 4 (23:09):
To go up.
Speaker 3 (23:10):
Yeah, there's another thing that you write about in your book,
which again could be a potential parallel, which is I
guess the role of technology back then. And I'm thinking
about the recent banking crisis mini drama, whatever you want
to call it, where you know, rumors about the health
of the bank flew around really really quickly on social
media and in private chat groups and things like that,
(23:33):
and some people thought that contributed to a lot of
the problems in the nineteen twenty nine crash. How quickly
did information disseminate and how quickly were the share price
drops actually, you know, reflected on the exchanges and communicated
to other people glacially.
Speaker 5 (23:53):
So one of the big technological problems in nineteen twenty
nine was that the quote unquote big board the New
York Stock Exchange would often fall behind literally by hours.
So you could be looking at the board thinking that,
you know what the score is, if you will, what
the crisis of the stock is, but it would literally
be hours off. And that's if you're physically on the
(24:18):
floor of the exchange. The folks on the floor were
then calling all the brokerage houses around the country and
even uptown in New York to tell them what the
numbers were in there, so their numbers were hopelessly out
of date. And you know, when you see pictures of
you know, thousands of people on the streets of Wall Street,
those famous pictures in October of nineteen twenty nine, the
reason there were so many people in the streets is
(24:39):
people had gone down there physically because they wanted to
see what was actually happening to their investments. Because you
couldn't call somebody, there was no app to look at,
and that, unto itself, created a real dilemma putting aside
what was going on.
Speaker 4 (24:55):
By the way, on.
Speaker 5 (24:55):
Some of these boats, you know, people were trading on boats.
Those guys were you know, half the day a day.
Speaker 3 (25:03):
They're sending pigeon carriers for the latest stock price.
Speaker 2 (25:06):
Well, Jesse livermore like he had his own phone lines, right,
he was sort of like, as they sitadet, I was
literally going to say, who's the Ken Griffin setting up
a sate light in his dorm or any one of
these people who later on tried to get a faster
line to the exchange with microwave towers. He did that
with phone lines.
Speaker 5 (25:23):
He did with phone lines and his own people literally
down on the floor that were then calling in the
bids back to his office so that he would have
better information than other people.
Speaker 3 (25:34):
Phone lines were the Lindy latency of the time. Yeah,
they were, That's what I said. Okay, another parallel. I'm
(25:55):
just going to throw out and you can agree or disagree.
Speaker 2 (25:58):
To Andrew a circle of them.
Speaker 3 (26:00):
Oh, there you go. Was there an Andrew ross Orkin
of the time.
Speaker 5 (26:03):
Well, there was an Alexander Noyes was the business editor
of the New York Times, and he was pretty respected guy.
So I think that would have been I would I
would take that interestingly. There was a retort the time,
Walter Lippman. Oh you know so, Walter, So Walter Lippman
was a very interesting journalist because he was he was
(26:26):
very inside. He had a very close relationship with Thomas
Lamont at JP Morgan. Some people might have said back
then afterwards, too close. He then turned around though actually
after a lot of these things emerged and sort of
really went after them. So I don't know there was
a but the other thing, I should say, we as
a group, meaning the journalistas, did not cover ourselves in glory,
(26:50):
in part because a lot of these people were being
paid off physically, like with cash. I mean talk about manipulation.
There were no insider trading laws. People were literally going
up to reporter forget about taking them at a dinner.
They were saying, here's money, and please write an article
saying such a such stock is bound to move higher
tomorrow because some rumor.
Speaker 3 (27:09):
Okay, so another parallel, just keep going. People talk about
AI nowadays and you see these charts of these sort
of I always say, it's an incestuous relationship between all
the different AI companies, where so and so is buying
from this company and then they're lending to this company,
and it all kind of comes full circle. When you
think about the nineteen twenty nine crash. A lot of
(27:29):
it was, you know, businesses issuing stock in order to
borrow money in order to invest in more stocks. Any
similarities there, that's sort of self I think it's very
circular dealing.
Speaker 5 (27:41):
Well, if you think about these investment trusts, there were
so many investment trusts that turned into sort of leverage
upon leverage. They were like Russian dolls of leverage and
you didn't really even know what was inside of them.
Speaker 4 (27:52):
I don't know if I can look at fully at.
Speaker 5 (27:55):
The AI companies like that just yet, though I think
there are probably certain types of deals in vendor financings
of arrangements that should be raising questions.
Speaker 4 (28:04):
But you could look at.
Speaker 5 (28:04):
The world of crypto actually you could look at you know,
Strategy Group is an interesting I mean, is Strategy is
like an investment trust. That's actually what it is. A
lot of these trusts that are emerging, that's what they are.
Speaker 2 (28:16):
The question for the firstwhile micro Strategy just people for
people who haven't been paying attention to the name.
Speaker 5 (28:21):
Yeah, formerly micro Strategy Michael Saylor. And so there are
these businesses that have similarities. Again, I don't want to
tell you that Strategy sure is in nineteen twenty nine
style investment trust per se.
Speaker 2 (28:33):
I don't know, I'm said in the intro, You're like,
have all these affiliations, you're still doing deal Book all
of this other stuff.
Speaker 3 (28:40):
Like what dude, we go up.
Speaker 2 (28:41):
Together, You're like, what is your because you're still doing
all of that. I've like paired back a bunch of them.
I don't do TV anymore, etceter Like, what is your
like date? I used to wake up with you, and
I used to, but then I stopped because I got
tired and you didn't. So what I want to know
is like, tell me about what's the day like for
you these days? What are you up to?
Speaker 4 (28:59):
So I wake up?
Speaker 5 (28:59):
You see around four thirty ish, I usually do sort
of the final pass on some deal book stuff till
call it five ten.
Speaker 4 (29:10):
Ish to just go straight to the computer.
Speaker 5 (29:13):
Yes, oh straight, there's no, there's no, yes, no. When
the alarm goes off, up up, up, and then I
do squat box oftentimes still fixing things in deal Book
up until the bitter end, and that usually goes till
about nine. Often go on to Morning Joe, maybe talk
a little economics there, and then get back into deal
(29:35):
book land as we plan out the next day's newsletter,
and then in between all of that, try to write this.
And I have three kids and get involved in other
projects and things. So it's a busy day that doesn't
typically end till the end of the day.
Speaker 3 (29:52):
What time do you go to bed?
Speaker 4 (29:53):
I try to go to bed.
Speaker 5 (29:54):
I try by nine thirty if I can be If
I can be in bed by nine.
Speaker 4 (29:59):
Thirty, this can work.
Speaker 5 (30:00):
Yeah, if it gets to ten or ten fifteen or anytime.
Speaker 2 (30:03):
After that, that's going to be a rough day.
Speaker 4 (30:05):
The next the next day is not a good day.
Speaker 3 (30:07):
Okay. Well, one of the things you're known for is,
you know, you have a lot of access. You know
a lot of people. What are you hearing right now?
You don't have to name names, obviously, but what are
you hearing? General opinions about the market and maybe the
influence of policy from the Trump administration.
Speaker 4 (30:23):
Oh goodness.
Speaker 5 (30:24):
So I don't know any CEO right now that is
particularly thrilled with the Trump administration, per se. I think
that most CEOs I know are quite troubled by things
that the Trump administration is doing. You won't normally hear that,
with the exception of maybe Ken Griffin or somebody like
(30:45):
that who's been somewhat public about some things, but of
course sort of modulated on others. Having said that, I
think they love the idea of deregulation. I think the
folks in finance, by the way, love the idea of
some of the things that Trump is doing, even when
it comes to things like, you know, earnings reports. You know,
(31:07):
most CEOs I know say I don't want to have
to do earnings you know, four times a year. I'll
do that twice. You have a whole movement afoot. And
by the way, this is this to me is a
parallel nineteen twenties we talked about democratizing finance.
Speaker 4 (31:19):
That was like a big concept.
Speaker 5 (31:21):
Now, this whole idea of democratizing finance in the context
of putting private credit and private equity and venture capital
inside your retirement accounts and these sort of semi liquid
funds and things, that's very nineteen twenty nine is to me.
So I do think there are people who like that,
but I think there's still this sort of underlying adjuta.
Speaker 2 (31:42):
Can you talk actually a little bit more about this
shattered a nation part of it? Like what is it?
I mean, there was a big downturn, we all know
about the Great Depression, did it threaten to rip apart
the country when it all ended well?
Speaker 5 (31:53):
So I think it ultimately did come close to ripping
apart of the country. But I think even maybe more
powerfully ripped apart generationally a psyche. So I don't tell
the story in the book because I didn't know if
it was appropriate, but I'll tell it to you. My
grandfather was eleven years old, he's no longer alive in
nineteen twenty nine.
Speaker 4 (32:14):
His brother was a messenger.
Speaker 5 (32:15):
Boy, and he was down there in October of ninet
twenty one. He used to tell the story, and he
was helping his brother and he watched somebody jump out
of a window. And he lived to leave ninety one
years old. And he never bought a share of stock
in his entire life. Bolts and bonds, never stock. And
(32:35):
he would always say, andrew this whole stock market thing,
not for.
Speaker 3 (32:40):
Us, too risky.
Speaker 5 (32:41):
And so I when I say shattering the nation, I
mean I think it did to some degree come close
to shattering the psyche of a nation.
Speaker 4 (32:49):
Did it come close to a civil war? No, But
clearly the idea.
Speaker 5 (32:54):
Of unemployment being twenty five percent in America, that there
were shanty towns otherwise known as Whoville's literally in Central Park.
There's a couple of blocks from here, and then you know,
worse in so many other places. I think for a
generation of people, it felt like a shattered nation.
Speaker 3 (33:10):
Yeah, you don't really go beyond the nineteen thirties in
the book, but it does feel like it took a
very long time to rebuild I guess trust in the
stock market, and we didn't really see retail like dive
in a lot until I guess the nineteen sixties, sixties.
Speaker 4 (33:25):
Yeah, I think that's right.
Speaker 5 (33:26):
I think that gets a little bit to the sort
of generational divide.
Speaker 4 (33:30):
Look, the other piece of this is the book.
Speaker 5 (33:32):
Doesn't go into World War Two and all the things
that happened after that. But that's actually I think coming
out of World War two is what ultimately led to
sort of the boom again to the extent we had
one in the US, and obviously the market's boom and
the reason why people I think started to get back
in the market was because the marke kept going up
and people started to look at the market like they
(33:53):
always do and when they think that the train is
leaving the station and they're not on the train. They
think I got to get on the train.
Speaker 2 (34:00):
Back to something you said before, It's interesting that these
CEOs don't really speak their mind. When the whole thing
in January was like finally free speech. We could talk again,
we could say all the things that we've been hiding.
It's kind of messed up, isn't it.
Speaker 5 (34:14):
Look you think that there should be real free speech
taking place and the people could raise their hand.
Speaker 2 (34:20):
The liberal attitude towards speech.
Speaker 5 (34:22):
But I think right now the view is what's the
trade off. I think there are people who look at
certain things happening in Washington and say, I don't like
what's happening. If I raise my hand now, if I
raise my hand today, what is the upside for raising
my hand and what is the downside for raising my hand?
I think they look and say, there's very little upside actually,
because the chance of real change in this moment right
(34:44):
now is unlikely. Maybe when we get to an election
or midterms or other things I don't know, and the
chance of it on the downside is high. I mean,
I think that between what we've seen the administration, do
the law firms to universities, paramount CBS story taking stakes
in Intel and other things. I mean, I think there's
(35:06):
real implications if you're a business leader today about how
you approach your job. Every business leader is almost have
to become a politician.
Speaker 3 (35:15):
All right, this is a very journalistic, classic cliche question.
I feel kind of bad, but you're another journalist, so
you know, don't judge me. If you could, I guess,
take away one lesson from the nineteen twenty nine crash
and really emphasize it to politicians, policymakers, regulators, business people, whoever,
what would it be.
Speaker 5 (35:36):
Every financial crisis is a function of one thing, is
leverage in the system. Too much leverage. You actually can
have speculators and all the bad actors you want doing
all the bad things you can imagine on stage, but
it's the leverage that tips it over. And as a result,
(35:57):
you need to have guard rails to prevent that because
the human condition is to want more, right, That's what
the investor class it's I hate to say, the idea
of self regulation is very very difficult. People do not
regulate themselves. They just don't, and so we just need
to be super careful, especially when there are all these
(36:18):
kind of new products being developed and other things. We
don't know where the leverage is. That to me would
be the single biggest thing. And my fear is we're
living in a moment right now actually where some of
those guardrails are almost purposely being taken away.
Speaker 2 (36:34):
Well, we have four years between it for until the
one hundred year anniversary of the nineteen twenty nine crash.
Andrew Osorkin so thrilled to finally have you on the podcast.
The book is a great opportourney. It's really great.
Speaker 4 (36:45):
I really appreciate.
Speaker 2 (36:46):
It's really cool that you did this. Everyone should be
very impressed and everyone should check it out. It's great history.
And I hope it becomes a TV show.
Speaker 4 (36:52):
Thank you. I hope.
Speaker 5 (36:53):
I hope I can come back here in twenty twenty
nine if you have.
Speaker 2 (36:56):
Four for sure, and then twenty third. Yeah, all right,
that Tracy.
Speaker 4 (37:14):
That was a lot of fun.
Speaker 2 (37:15):
I love bubble history. We used to do tons of
more episodes on They're always really fun.
Speaker 3 (37:20):
Well, you know the Florida Land bubble gets mentioned.
Speaker 2 (37:23):
Yeah, we did so a bunch of episodes on that.
And this is really cool. I love all the pop
culture elements, the Winston Churchill, the Groageo marks.
Speaker 3 (37:32):
It's just astrology.
Speaker 2 (37:33):
It's an incredibly rich story. It's incredibly rich piece of history.
Speaker 3 (37:36):
Yeah, and it is funny. You can't avoid thinking about
the parallels. You really can't. When am I getting my
Japanese Exotic Rabbit bubble episode?
Speaker 2 (37:44):
Wait anytime? Was that a bubble? I didn't know about
that apparently?
Speaker 3 (37:48):
And sheep, I want to do New England sheep too.
I want to do all the animal bubbles.
Speaker 2 (37:52):
Let's do it. Let's do them all. Here's the bat
the guano bubble. We've never done an episode on that.
But the one other thing too, is that think like
you know, two thousand and seven, two thousand and eight,
the Great Financial Crisis, that was like a debt bubble,
right There were a bunch of assets that were expected
to pay back at a dollar on the dollar, and
they like paid back at ninety cent and then people
panicked into his a bank.
Speaker 3 (38:12):
There's still a lot of credit tied to it.
Speaker 2 (38:14):
There was a lot of There was definitely the leverage.
Speaker 3 (38:16):
The debt was being used as collateral.
Speaker 2 (38:18):
For the debt was being used as a collateral. But
it was you know, right now, we don't It just
feels like it's a stock story, so I can say
things everyone wants access to the right tail, yeah, whatever,
and everyone wants the big score, et cetera. And that's
what sort of nineteen twenty nine reminds me of this idea,
like different than a sort of like housing bubble, just
this idea like everyone wants those right tail outcomes, including
(38:40):
Winston Churchill and Groad show mark.
Speaker 3 (38:41):
Well, you know the chart that the Doomers always tweet
is the margin debt chart, right, And you know, I
have doubts about that because the margin debt chart goes
up when stocks go up, basically, but it is at
record high.
Speaker 2 (38:53):
So anyway, people should definitely check out this book.
Speaker 3 (38:56):
All right, shall we leave it there?
Speaker 4 (38:57):
Let's leave it there.
Speaker 3 (38:58):
This has been another episode of the All Thoughts Pod.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (39:03):
And I'm Jill Wisenthal. You can follow me at the Stalwart.
Follow our producers Carmen Rodriguez at Kerman armand dash O
Bennett at Dashbod and Kale Brooks at Kalebrooks. For more
odd Lots content, go to Bloomberg dot com Flash Odd
Lots with a daily newsletter. And all of our episodes,
and you can shut about all of these topics twenty
four to seven in our discord discord dot gg slash
(39:23):
od Lots and.
Speaker 3 (39:24):
If you enjoy odd Lots, if you like it when
we talk about the crash of the nineteen twenties, then
please leave us a positive review on your favorite podcast platform.
And remember, if you are a Bloomberg subscriber, you can
listen to all of our episodes absolutely ad free. All
you need to do is find the Bloomberg channel on
Apple Podcasts and follow the instructions there. Thanks for listening
(40:01):
It
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lats podcast.
Speaker 3 (00:22):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2 (00:24):
Tracy, It's been a theme in a lot of our
episodes lately, but we are in an age where trading
and speculation it's just part of the culture. We know
that stocks are up, we know that a lot of
things are up, but that's different than it being part
of pop culture, which it is now.
Speaker 3 (00:38):
It's a culture of lines, lines going up. People watch
the lines.
Speaker 2 (00:42):
I really think that if you're walking down the street
or on the subway and you see like a guy
staring at there's a good chance that he's like looking
at it.
Speaker 3 (00:49):
A bitcoin bitcoin shart.
Speaker 2 (00:50):
Yeah, yeah, any given moment.
Speaker 3 (00:52):
Well, this was one of the things about bitcoin. It
was so volatile, there was actually something to watch. There's
like an entertainment factor. But of course when you get
this kind of speculative activity, everyone starts worrying about when's
it going to end or when's the crash.
Speaker 2 (01:07):
I have this theory that nobody likes bubbles, and that
basically if there is a bubble, there's two camps of people.
One camp that is really upset that they're missing out
on it, and one camp that is really anxious that
they're going to miss the top, and that there are
actually very few people in the camp where it's like, oh,
this is like really good, I'm really happy.
Speaker 3 (01:24):
I'm really The people who nail the timing are pretty
pleased with themselves, I assume.
Speaker 2 (01:29):
And there's like five of those people, you know, like
that's the problem. Afterwards, always like I sold the top.
Speaker 4 (01:33):
I feel good.
Speaker 3 (01:34):
Yeah, absolutely, Okay, So famous crashes, we're going to talk
about one of them.
Speaker 2 (01:38):
You know, I remember the dot com era very well.
I don't remember the market environment.
Speaker 3 (01:43):
We're going to talk about the nineteen twenties. You have
no memory of that. Shame on you.
Speaker 2 (01:48):
I don't remember nineteen twenty nine very well. I did
read John Kenneth Galbray's famous book, The Great Crash, But
there's a new book out on the great stock market
boom and then crash of nineteen twenty nine. We are
going to be speaking with the author, someone I'm thrilled
to talk to, someone who's accomplishments and work ethic puts
us all to shame. We're going to be speaking with
the one and only Andrew Rasorkin, founder of Deal Book
(02:10):
at New York Times, co creator of Billions, co host
of Some squawk Box the NBC. I made that joke
with a Jim Cameron, as if I'd never heard the
network and now the author of nineteen twenty nine Inside
the greatest crash in history and how it shattered a nation. Andrew,
thank you so much for coming on odd Laws, thrilled
to heavy hair.
Speaker 5 (02:29):
Thank you for having me. I feel like I'm a
longtime listener, first time caller.
Speaker 4 (02:33):
Amazing.
Speaker 3 (02:33):
Thank you.
Speaker 2 (02:34):
So this isn't the first time nineteen twenty nine has
been written about in the gall Braith book. It's probably
like that was up until now, probably the most famous.
It is a great book, right, What was the impulse
to go back and write a book about this period
of time?
Speaker 5 (02:47):
To be honest with you, it was about ten years
ago I'd written Too Big to Fail. People used to
ask me because I had written about the financial crisis
at two thousand and eight, they'd ask me questions about
nineteen twenty nine, and the.
Speaker 4 (02:59):
Truth, I didn't really have answers because I sort of knew.
Speaker 5 (03:03):
I think, like most of the public today, that something
pretty bad happened.
Speaker 4 (03:07):
Then. I had read the gull Broth book, but sort.
Speaker 5 (03:10):
Of beyond that, I was lacking details, And I honestly
I went on a vacation. It's like a nerdy vacation
thing to do. I downloaded some books to Kindle, and
I brought some more with me. All about nineteen twenty nine.
I sort of poured through them, and I thought to myself,
why can't I understand who the characters are, like the
(03:31):
people at a visceral level, like what were they saying
to each other? What were their motivations, were their incentives,
who was sleeping with who? What was really happening here?
And you know, I grew up sort of loving books
like that written by Michael Lewis or Jim Stewart.
Speaker 3 (03:49):
With Denna Feeves you mentioned A Night to Remember or A.
Speaker 5 (03:52):
Night to Remember with the Titanic was a great example
of a book that really sort of made things feel human.
And so I thought, you know what, could somebody, and
maybe it was me do that to nineteen twenty nine
and the youth was I wasn't sure I could that.
One of the reasons I think this took so long
was the entire time I wasn't sure. And when I
(04:12):
first started it, actually I mean started doing the research,
many of the archivists that I went to visit with
were like Andrew, we've read too Big to fail, that
kind of granular detail. It's just too hard to find.
And by the way, all the people are dead obviously,
so there's nobody in interview to you. You're really reliant
on letters and notes and memos and transcripts. And the
truth is, there wasn't like two or three or four
(04:33):
major archives you could sort of go excavate, and so
this turned into this sort of bizarre, years long project
of putting these puzzle pieces together.
Speaker 3 (04:45):
I can only imagine how much archival research you had
to do for this book. It is very filled with
texture and personality and lots and lots of details. Is
there a particular character that kind of stuck out to
you in this book? I've read about Charles Mitchell. He's
sort of the villain, But then towards the end of it,
(05:05):
you have a sort of more nuanced opinion.
Speaker 4 (05:08):
So I think there's a couple of characters.
Speaker 5 (05:10):
And the truth is I would also say one other thing,
because I know we'll probably end up talking about today
like modern day today. When I started writing this book,
I never even thought about today. I was thinking really
about then. I didn't think I was.
Speaker 2 (05:23):
Because if this is the top this year, you nailed
the time.
Speaker 5 (05:25):
But as I was working on this, these characters to me,
like Charlie Mitchell, who ran a bank called National City
which becomes City Group, parallels to me between him. He
effectively invented sort of modern credit for lending, if you will,
to individuals to go and buy stock. I mean to me,
(05:45):
back then, he would have been as famous as a
Jamie Diamond of today. He might have been the Michael
Milken of his time. In certain ways. He might have
been even like a Dick Fold kind of character from
Lehman Brothers. So I was fascinated with Charlie Mitchell, and
he was actually one of the hardest characters to really
write because there really is no archive. He didn't keep
his own notes. It was really dependent on actually finding
other archives of letters and things that he participated in.
(06:09):
He was on the board of the New York Fed,
and I was able to get the minutes from those
FED meetings for the first time, and that really actually
sort of grounded the project. I became fascinated by John Raskob,
who to me is like Elon Musk in the nineteen twenties,
he was everywhere all the time. Philosopher King helped run
(06:31):
General Motors, really created credit at General Motors, which really
changed America. That's actually when people started taking on credit
for the first time. Goes on to play the market,
goes on to get involved in politics. He actually tried
to undermine Hoover's reputation in sort of a Musky kind
of way, if you will, and then goes to build
(06:52):
what was then the equivalent of a spaceship in the
Empire State Building. And meanwhile, I don't know if he
gets credit for it, if he really did to some
degree come up with the idea at least or became
an advocate for a five day work week in America.
People forget there were six days back then, And he
thought it was an would be an economic boon because.
Speaker 3 (07:12):
People would have to go and spend your money.
Speaker 5 (07:14):
Go spend money, they'll buy cars, they'll have to go play,
they'll have time to go places, do all sorts. So
I thought he was fascinating. And then the last person
carter Glass carter Glass to a glass degal fame. He
was a senator in Virginia, by the way, helped create
the bill that led to the creation of the Federal Reserve.
But he was the Elizabeth Warren of his time, and
(07:36):
he used to rail for years about this thing called
Mitchellism and this idea that Charlie Mitchell and the creation
of debt and leverage in the system was what was
gonna undo it.
Speaker 4 (07:45):
The gold Brief.
Speaker 2 (07:45):
Book talks a lot about the I guess what were
they that it was before mutual funds. What were they called?
The trust?
Speaker 4 (07:50):
The investment trust, the investment trust.
Speaker 2 (07:52):
But your book talks a lot about this idea of
like retail leverage basically which were you described and you
talk about they would say, okay, we've tadd people that
they can buy a car on margin, or a car
on credit, or a dishwasher, why not a stock And
it seems like they really trans a lot of people
in industry really sort of transported this consumer notion that
(08:13):
was nascent and just like, yeah, let's pourt it over.
Speaker 5 (08:16):
I didn't appreciate that back then. I mean, brokerages were
springing up on the corners of the streets. The way
they're like Starbucks in New York.
Speaker 4 (08:22):
It was really fun.
Speaker 2 (08:23):
I always think about these physical or like the brokerage
on a cruise. Wouldn't be fun to just walk in
and play the market.
Speaker 3 (08:29):
You mentioned lounges in like hotels, women only stock trading launches,
which you know, I would go for those. Nowadays, they
don't have to be women only, but just a place.
Speaker 5 (08:39):
Every thing that was nuts, though, is you would show
up and you could give them a dollar and they
would literally lend you ten. I mean, that's what we're
talking about. And so when the market was going up,
it really was like free money. And I think this
was the first time this is ever really happening, and
so people didn't fully appreciate all the things that were possible.
Speaker 3 (09:00):
There's another parallel with today, which is a lot of
the stock market being driven by AI, right, And when
people talk about the market opportunity in AI, it's basically uncapped.
It's the entire world. It's like all of business. And
in the nineteen twenties, people were saying stocks were going
to go up because the entire world was buying into
(09:21):
the US.
Speaker 4 (09:22):
I think that's very true.
Speaker 5 (09:23):
I would actually specifically point actually to a technology story
back then, which was radio Radio. The ticker symbol was Radio,
the company was RCA. They also, by the way, not
only had the technology for radio, they had the patents
for television and that was the Nvidia. I mean, that
was the meme stock of that era, because people were
(09:45):
buying into this future that we were all going to experience,
and they wouldn't have been wrong.
Speaker 4 (09:49):
By the way.
Speaker 5 (09:51):
The conundrum is, I think the stock split adjusted at
the peak was like got to five hundred and thirty
SOMEID dollars and by nineteen thirty two was like three dollars.
Speaker 2 (10:00):
So one thing I was, you know, obviously when radio
comes to RCA, you're like, oh, it's the video of
the time. In video makes a ton of money, and
it makes more money every year. We'll see. We don't
know how sustainable that is, because some of that is
them investing in companies which come back and buy in video.
Speaker 4 (10:16):
But setting that aside vendor financing.
Speaker 2 (10:18):
Was RCA making a ton of money or was it
mostly excitement about the future. Do we have Radio's financials
from the twenties.
Speaker 5 (10:26):
So the bad news is we don't. In fact, somebody
said to me the other day, did you ever get
a chance to look at the prospectuses of these stocks.
And I said prospectuses. They hardly had leaflets. I mean,
and that's if they had anything. They literally would be
leaflets that they would handle.
Speaker 2 (10:42):
Other pes ratios going the period.
Speaker 5 (10:44):
It was very hard to get real information. Again, this
is pre the creation of the SEC. The kind of
rules and regulations and just disclosures just didn't exist in
the same way that they do today.
Speaker 3 (10:58):
So would you just get like a check in the
mail for a dividend every once in a while, Like
what access did you actually have?
Speaker 5 (11:03):
So my understanding is that you would get a check
in the mail. In fact, oftentimes they wouldn't come in
the mail. You'd actually go to the brokerage house itself,
and in some cases they would keep that for you
and sometimes either reinvest it or keep it on like
a ledger, if you will.
Speaker 4 (11:19):
But I don't know the.
Speaker 5 (11:20):
Specifics exactly of how you would deal with your dividend
when and if you got it.
Speaker 2 (11:25):
One thing I really like in the book is all
these different characters from American from world history, you telling
the story of them getting really obsessed with the stock market.
So Winston Churchill, on an early trip to the United
States gets really into margin trading. I think, like you
talk about growd show Mary and getting really insane.
Speaker 4 (11:41):
To me, that was also like a great surprise.
Speaker 2 (11:44):
That was also not something I'd read about.
Speaker 5 (11:45):
I had no idea that Winston Churchill shows up in
New York actually have been the US even before this,
But in New York in October of nineteen twentyine he
was actually down on the floor of the Stock Exchange
visiting while this was all happening. He was totally engrossed
in trading. He was trying to make mine. He ends
up losing money, of course, like everybody else. He ends
up going to a dinner with all the leading bankers
(12:06):
the night that the market completely and utterly tanks. And similarly,
I didn't know about it either. But you know, Groucho
Marx was living in Long Island, and basically I shouldn't
say he was living on island, but he was recording
to his son. He was really living at a brokerage house,
trying to retape every day, and he ends up having
to mortgages home to pay for the margin calls when
(12:28):
they called.
Speaker 3 (12:45):
Some people did make money. Going back to our intro,
very few people managed to make money, but some of
them did, and spectacular amounts. Can you talk a little
bit about Jesse Livermore.
Speaker 5 (12:55):
The great Jesse Livre. There's been a lot written about
Jesse Livermore. Just delivering more is a arter in this book.
Of course, I don't know if we should give away
the ending for those who don't know, but Jesse Liveringwore
ultimately shoots himself in the head at nineteen forty one
over at the Sherry Netherlands.
Speaker 3 (13:11):
Shooting themselves in the head.
Speaker 5 (13:12):
In this book, there's a lot of shooting, jumping out
windows and other things. But you know, Jesse was a
short seller, and he was spectacularly successful in the crash itself.
The truth was, though he had been super successful in
parts of the twenties, and then was actually quite a
failure in most of twenty seven and twenty eight and
(13:33):
twenty nine because the market kept going up and he
was almost out of business. And then he goes back
in in the fall of twenty nine and makes something
like one hundred million dollars plus. But of course, like
I think any of these sort of super emotionally complicated people,
he ultimately loses it, I mean quickly, and then you know,
(13:56):
makes makes a little bit more, loses a little bit more,
makes a little bit more, and then this is well everything.
Speaker 2 (14:02):
You said that when you started this book. It started
a decade ago, so it is not about some attempt
to make a parallel today, even though the timing may
things are very crazy these days. Many people would say,
I've always been curious about this, Chris. When I read
history of any sort, the brain can't help but try
to find parallels to the present. I think, at least
for me, it's like, oh, this is just like this,
(14:23):
just like this. When you're doing the process of writing history,
do you have any mechanisms in place to avoid the
temptation to sort of overdraw parallels, because that must be
incredibly tempting to find the details that feel salient and
similar today. This is the Nvidia of the time, This
is the Kathy word of the time, this is whatever.
Speaker 4 (14:44):
So yes and no.
Speaker 5 (14:46):
I think it wasn't until two years ago when I
was getting closer to being finished and also sort of
recognizing what was happening in the moment today, and the
parallel started to seem clearer and closer. So three and
four years ago, actually it didn't feel as similar, oddly enough.
But all of a sudden, you're starting to see these
(15:08):
debates that they're having in literally the spring of nineteen
twenty nine about whether to raise or lower interest rates,
and how they're going to try to end speculation within
the New York Fed and to some degree the political
pressures that are around them, And you start to say yourself, well,
that seems kind of I've been hearing a lot about that,
so I hesitated to sort of overdo it. But I
(15:32):
also was cognizant that I imagined readers who were reading it
might think about some of these things. And one of
the decisions we made in particular, I remember having lots
of debates with my editor about was nowhere in the
book did we ever want to stop the reader and
take you out of nineteen twentynine and say, hey, by
the way, this is kind of like that, or this
is kind of like that. Some readers may see these
(15:54):
parallels or different things themselves, some may never see them,
and some may come up with completely different parallels.
Speaker 4 (16:00):
And I would love that.
Speaker 3 (16:01):
Frankly, I have a parallel. Okay, something that happened slightly
after the crash is smoot Holly right. The tariffs, and
today we're in the Trump administration with very broad, widespread tariffs.
Speaker 5 (16:15):
Yeah, that wasn't on my bingo card when I was
writing that originally.
Speaker 3 (16:18):
I'm curious how much of the subsequent Great Depression would
you attribute to those sorts of economic policies versus the
stock market crash itself.
Speaker 5 (16:29):
So I actually think there was a lot of bad
decisions and dominoes that came after the crash itself that
really is what put us into the Great Depression. So
I look at the crash and really only the first
half of this book is about the crash itself as
sort of the first domino of a series of things
(16:51):
that were sort of the necessary ingredients to create the depression. So,
you know, when you think about all of the bad decisions,
the tariffs are one of those decisions, the idea that
Andrew Mellon, who is our Treasury secretary, who was effectively saying,
let these capitalists eat it. They were speculating, let them suffer.
(17:11):
You know, when you think about the fact that the
FED really did very little at the time and almost
sat on their hands in large part, I would argue,
because the FED was such a new institution, people forget
who was born in nineteen thirteen, that they were cognizant.
Speaker 4 (17:25):
Of the political pressures.
Speaker 5 (17:26):
If they were seen, they couldn't have pulled off a
voker like moved. They knew there were speculation, but if
they had said, Okay, we're going to really just raise
interest rates, by the way, it wasn't that we're going
to lose their jobs. I think they actually feared that
maybe there wouldn't be a FED. So I think there
was sort of the consonance of all of these different
things we talked about the gold standard. I mean, there's
sort of a series of things that take place that
(17:47):
lead eventually to nine thousand banks going out of business
and unemployment at twenty five percent.
Speaker 2 (17:53):
It's interesting speaking of the FED because these days there's
all this question of like we're looking at financial condition,
at real economy, et cetera. It's interesting how maybe the
FED didn't do enough to curb speculation, or maybe at
some point didn't do enough to counteract the downturn. But
they were very keyed into the rate on margin lending
(18:15):
as one of their main tools that they had in
their toolkit.
Speaker 4 (18:18):
So that was their big tool, or what they thought
was their.
Speaker 5 (18:21):
Tool However, they didn't really use it, and so you
had this sort of fascinating debate happening in the spring
of nineteen twenty nine, when they're sitting there saying, there's
too much speculation.
Speaker 4 (18:32):
We need to end the speculation. How do we do that?
Speaker 5 (18:35):
Well, the decision they came to, effectively was to send
out letters to banks saying, please stop lending to speculators,
to which the banker said, what are you talking about?
How you define what a speculator is? What what isn't one?
Some of the banks were so scared that they effectively
stopped lending. That, unto itself, was a problem. And then
you had people like Charlie Mitchell, who, by the way,
(18:57):
in that moment you would have compared to Donald Trump
saying actually lower interest rates please. So I think there
was this sort of fascinating dynamic that you could sort
of see play out. Again, these are some of the details.
I don't think I understood the texture of what really
led to all of this.
Speaker 3 (19:13):
There's another parallel, speaking of the FED. This might be
pressing it or stretching it a little bit, but I
get the sense that nowadays people feel that the FED
can come up with any solution to any problem.
Speaker 4 (19:26):
Right.
Speaker 3 (19:26):
We've seen them roll out tons and tons of different programs,
whether it's for corporate credit or repo treasuries, that sort
of thing. In the nineteen twenties, there was a sense
that America had beaten the boom bus cycle, right, because
there was another crash previously, which was nineteen oh seven.
Speaker 5 (19:44):
Look again, I think this is one of those things
where because of the nineteen oh seven experience, which by
the way, was solved effectively by JP Morgan taking a
bunch of bankers and trapping them in a room until
they could figure out what they were going to do,
led to a sort of sense of overconfidence, and not
just overconfidence, a sense among certain men, men of a
(20:07):
certain group, if you will, that if you could just
put the right people in a room together, we could
solve anything. Thomas Lamont was effectively running JP Morgan during
this period. JP Morgan himself had died. His son Jack
was the CEO in name, but really Thomas was running things,
and he was one of those kind of believers. But
(20:29):
I think that nineteen twenty nine and what happened in
the markets just got so far away from them that
they realized that there was nothing, ultimately in the end
they could do, and they didn't know that until Lewis
too late.
Speaker 2 (20:41):
So nineteen oh seven, literally one hundred years before our crash,
the Great financial crisis that leading to all of this
overconfidence that there is just an endless series of tools
that the government has to stop anything.
Speaker 4 (20:54):
And then we get you're making your own power. It's
how do you not? How do you?
Speaker 3 (20:58):
How can the brain?
Speaker 2 (21:00):
And I don't even like, I'm not even arguing there's
a parallel. I just think that the brain naturally sees
these things and we can't avoid it. Maybe, by the way,
we'ren't twenty five, so we still have four years.
Speaker 1 (21:10):
Four four years.
Speaker 2 (21:11):
That's not financial advice, but four years are going to
try and.
Speaker 4 (21:13):
Make my money?
Speaker 2 (21:15):
Wait, maybe this I'm gonna ask you. I don't know
if there's you may not even want to answer that.
This could be like a really good movie or TV
show on Netflix.
Speaker 3 (21:22):
Oh yeah, yes, I thought it's very.
Speaker 2 (21:24):
Guilded, gilded. Yeah I had that thought too. You gonna
can you give us a little news here?
Speaker 4 (21:28):
I don't have any news for you, you know, co
creator of Billions.
Speaker 5 (21:32):
Happily, there's a bunch of folks in Hollywood who've been
reaching out recently, and there's some conversations going on, but
no news, and I you know, one of those cross
your fingers kind we.
Speaker 2 (21:43):
Could officially say that we think it would be a
good show.
Speaker 3 (21:45):
We want cameos, we want cameos.
Speaker 5 (21:47):
We can organize that this is a period piece, so
we're gonna have to.
Speaker 3 (21:51):
I love it.
Speaker 2 (21:52):
Tracy could be the astrologer that hangs out stock tips
based about.
Speaker 5 (22:00):
That, So you're talking about Evangeline Adams. She was an
astrologer and an astrologer who was taken shockingly seriously at
that time by all sorts of financiers. Before he died.
JP Morgan himself was famous for going to visit with her.
She had an office in Carnegie Hall and she would
literally sit inside the Plaza Hotel and people would come
(22:23):
up and talk to her and visit with Jenner newsletter
and then, by the way, interestingly, in October of nineteen
twenty nine, as the market is crashing and people don't
always appreciate the crash really happened over several days. It
was not just one bad day. She would have these
almost like seances where people would come to her office,
and she wasn't doing one on ones at that point
(22:44):
because the groups were so big.
Speaker 3 (22:47):
She was summoning the animal spirits, yes.
Speaker 5 (22:49):
And she was praying for, of course, for high stock prices. Interestingly,
she got a lot of credit for the stock market
boom because in the fall of twenty nine, I think
right after Labor Day in September, a reporter called her
and asked her what was in the stars. Of course,
she told everybody that the market was going.
Speaker 4 (23:09):
To go up.
Speaker 3 (23:10):
Yeah, there's another thing that you write about in your book,
which again could be a potential parallel, which is I
guess the role of technology back then. And I'm thinking
about the recent banking crisis mini drama, whatever you want
to call it, where you know, rumors about the health
of the bank flew around really really quickly on social
media and in private chat groups and things like that,
(23:33):
and some people thought that contributed to a lot of
the problems in the nineteen twenty nine crash. How quickly
did information disseminate and how quickly were the share price
drops actually, you know, reflected on the exchanges and communicated
to other people glacially.
Speaker 5 (23:53):
So one of the big technological problems in nineteen twenty
nine was that the quote unquote big board the New
York Stock Exchange would often fall behind literally by hours.
So you could be looking at the board thinking that,
you know what the score is, if you will, what
the crisis of the stock is, but it would literally
be hours off. And that's if you're physically on the
(24:18):
floor of the exchange. The folks on the floor were
then calling all the brokerage houses around the country and
even uptown in New York to tell them what the
numbers were in there, so their numbers were hopelessly out
of date. And you know, when you see pictures of
you know, thousands of people on the streets of Wall Street,
those famous pictures in October of nineteen twenty nine, the
reason there were so many people in the streets is
(24:39):
people had gone down there physically because they wanted to
see what was actually happening to their investments. Because you
couldn't call somebody, there was no app to look at,
and that, unto itself, created a real dilemma putting aside
what was going on.
Speaker 4 (24:55):
By the way, on.
Speaker 5 (24:55):
Some of these boats, you know, people were trading on boats.
Those guys were you know, half the day a day.
Speaker 3 (25:03):
They're sending pigeon carriers for the latest stock price.
Speaker 2 (25:06):
Well, Jesse livermore like he had his own phone lines, right,
he was sort of like, as they sitadet, I was
literally going to say, who's the Ken Griffin setting up
a sate light in his dorm or any one of
these people who later on tried to get a faster
line to the exchange with microwave towers. He did that
with phone lines.
Speaker 5 (25:23):
He did with phone lines and his own people literally
down on the floor that were then calling in the
bids back to his office so that he would have
better information than other people.
Speaker 3 (25:34):
Phone lines were the Lindy latency of the time. Yeah,
they were, That's what I said. Okay, another parallel. I'm
(25:55):
just going to throw out and you can agree or disagree.
Speaker 2 (25:58):
To Andrew a circle of them.
Speaker 3 (26:00):
Oh, there you go. Was there an Andrew ross Orkin
of the time.
Speaker 5 (26:03):
Well, there was an Alexander Noyes was the business editor
of the New York Times, and he was pretty respected guy.
So I think that would have been I would I
would take that interestingly. There was a retort the time,
Walter Lippman. Oh you know so, Walter, So Walter Lippman
was a very interesting journalist because he was he was
(26:26):
very inside. He had a very close relationship with Thomas
Lamont at JP Morgan. Some people might have said back
then afterwards, too close. He then turned around though actually
after a lot of these things emerged and sort of
really went after them. So I don't know there was
a but the other thing, I should say, we as
a group, meaning the journalistas, did not cover ourselves in glory,
(26:50):
in part because a lot of these people were being
paid off physically, like with cash. I mean talk about manipulation.
There were no insider trading laws. People were literally going
up to reporter forget about taking them at a dinner.
They were saying, here's money, and please write an article
saying such a such stock is bound to move higher
tomorrow because some rumor.
Speaker 3 (27:09):
Okay, so another parallel, just keep going. People talk about
AI nowadays and you see these charts of these sort
of I always say, it's an incestuous relationship between all
the different AI companies, where so and so is buying
from this company and then they're lending to this company,
and it all kind of comes full circle. When you
think about the nineteen twenty nine crash. A lot of
(27:29):
it was, you know, businesses issuing stock in order to
borrow money in order to invest in more stocks. Any
similarities there, that's sort of self I think it's very
circular dealing.
Speaker 5 (27:41):
Well, if you think about these investment trusts, there were
so many investment trusts that turned into sort of leverage
upon leverage. They were like Russian dolls of leverage and
you didn't really even know what was inside of them.
Speaker 4 (27:52):
I don't know if I can look at fully at.
Speaker 5 (27:55):
The AI companies like that just yet, though I think
there are probably certain types of deals in vendor financings
of arrangements that should be raising questions.
Speaker 4 (28:04):
But you could look at.
Speaker 5 (28:04):
The world of crypto actually you could look at you know,
Strategy Group is an interesting I mean, is Strategy is
like an investment trust. That's actually what it is. A
lot of these trusts that are emerging, that's what they are.
Speaker 2 (28:16):
The question for the firstwhile micro Strategy just people for
people who haven't been paying attention to the name.
Speaker 5 (28:21):
Yeah, formerly micro Strategy Michael Saylor. And so there are
these businesses that have similarities. Again, I don't want to
tell you that Strategy sure is in nineteen twenty nine
style investment trust per se.
Speaker 2 (28:33):
I don't know, I'm said in the intro, You're like,
have all these affiliations, you're still doing deal Book all
of this other stuff.
Speaker 3 (28:40):
Like what dude, we go up.
Speaker 2 (28:41):
Together, You're like, what is your because you're still doing
all of that. I've like paired back a bunch of them.
I don't do TV anymore, etceter Like, what is your
like date? I used to wake up with you, and
I used to, but then I stopped because I got
tired and you didn't. So what I want to know
is like, tell me about what's the day like for
you these days? What are you up to?
Speaker 4 (28:59):
So I wake up?
Speaker 5 (28:59):
You see around four thirty ish, I usually do sort
of the final pass on some deal book stuff till
call it five ten.
Speaker 4 (29:10):
Ish to just go straight to the computer.
Speaker 5 (29:13):
Yes, oh straight, there's no, there's no, yes, no. When
the alarm goes off, up up, up, and then I
do squat box oftentimes still fixing things in deal Book
up until the bitter end, and that usually goes till
about nine. Often go on to Morning Joe, maybe talk
a little economics there, and then get back into deal
(29:35):
book land as we plan out the next day's newsletter,
and then in between all of that, try to write this.
And I have three kids and get involved in other
projects and things. So it's a busy day that doesn't
typically end till the end of the day.
Speaker 3 (29:52):
What time do you go to bed?
Speaker 4 (29:53):
I try to go to bed.
Speaker 5 (29:54):
I try by nine thirty if I can be If
I can be in bed by nine.
Speaker 4 (29:59):
Thirty, this can work.
Speaker 5 (30:00):
Yeah, if it gets to ten or ten fifteen or anytime.
Speaker 2 (30:03):
After that, that's going to be a rough day.
Speaker 4 (30:05):
The next the next day is not a good day.
Speaker 3 (30:07):
Okay. Well, one of the things you're known for is,
you know, you have a lot of access. You know
a lot of people. What are you hearing right now?
You don't have to name names, obviously, but what are
you hearing? General opinions about the market and maybe the
influence of policy from the Trump administration.
Speaker 4 (30:23):
Oh goodness.
Speaker 5 (30:24):
So I don't know any CEO right now that is
particularly thrilled with the Trump administration, per se. I think
that most CEOs I know are quite troubled by things
that the Trump administration is doing. You won't normally hear that,
with the exception of maybe Ken Griffin or somebody like
(30:45):
that who's been somewhat public about some things, but of
course sort of modulated on others. Having said that, I
think they love the idea of deregulation. I think the
folks in finance, by the way, love the idea of
some of the things that Trump is doing, even when
it comes to things like, you know, earnings reports. You know,
(31:07):
most CEOs I know say I don't want to have
to do earnings you know, four times a year. I'll
do that twice. You have a whole movement afoot. And
by the way, this is this to me is a
parallel nineteen twenties we talked about democratizing finance.
Speaker 4 (31:19):
That was like a big concept.
Speaker 5 (31:21):
Now, this whole idea of democratizing finance in the context
of putting private credit and private equity and venture capital
inside your retirement accounts and these sort of semi liquid
funds and things, that's very nineteen twenty nine is to me.
So I do think there are people who like that,
but I think there's still this sort of underlying adjuta.
Speaker 2 (31:42):
Can you talk actually a little bit more about this
shattered a nation part of it? Like what is it?
I mean, there was a big downturn, we all know
about the Great Depression, did it threaten to rip apart
the country when it all ended well?
Speaker 5 (31:53):
So I think it ultimately did come close to ripping
apart of the country. But I think even maybe more
powerfully ripped apart generationally a psyche. So I don't tell
the story in the book because I didn't know if
it was appropriate, but I'll tell it to you. My
grandfather was eleven years old, he's no longer alive in
nineteen twenty nine.
Speaker 4 (32:14):
His brother was a messenger.
Speaker 5 (32:15):
Boy, and he was down there in October of ninet
twenty one. He used to tell the story, and he
was helping his brother and he watched somebody jump out
of a window. And he lived to leave ninety one
years old. And he never bought a share of stock
in his entire life. Bolts and bonds, never stock. And
(32:35):
he would always say, andrew this whole stock market thing,
not for.
Speaker 3 (32:40):
Us, too risky.
Speaker 5 (32:41):
And so I when I say shattering the nation, I
mean I think it did to some degree come close
to shattering the psyche of a nation.
Speaker 4 (32:49):
Did it come close to a civil war? No, But
clearly the idea.
Speaker 5 (32:54):
Of unemployment being twenty five percent in America, that there
were shanty towns otherwise known as Whoville's literally in Central Park.
There's a couple of blocks from here, and then you know,
worse in so many other places. I think for a
generation of people, it felt like a shattered nation.
Speaker 3 (33:10):
Yeah, you don't really go beyond the nineteen thirties in
the book, but it does feel like it took a
very long time to rebuild I guess trust in the
stock market, and we didn't really see retail like dive
in a lot until I guess the nineteen sixties, sixties.
Speaker 4 (33:25):
Yeah, I think that's right.
Speaker 5 (33:26):
I think that gets a little bit to the sort
of generational divide.
Speaker 4 (33:30):
Look, the other piece of this is the book.
Speaker 5 (33:32):
Doesn't go into World War Two and all the things
that happened after that. But that's actually I think coming
out of World War two is what ultimately led to
sort of the boom again to the extent we had
one in the US, and obviously the market's boom and
the reason why people I think started to get back
in the market was because the marke kept going up
and people started to look at the market like they
(33:53):
always do and when they think that the train is
leaving the station and they're not on the train. They
think I got to get on the train.
Speaker 2 (34:00):
Back to something you said before, It's interesting that these
CEOs don't really speak their mind. When the whole thing
in January was like finally free speech. We could talk again,
we could say all the things that we've been hiding.
It's kind of messed up, isn't it.
Speaker 5 (34:14):
Look you think that there should be real free speech
taking place and the people could raise their hand.
Speaker 2 (34:20):
The liberal attitude towards speech.
Speaker 5 (34:22):
But I think right now the view is what's the
trade off. I think there are people who look at
certain things happening in Washington and say, I don't like
what's happening. If I raise my hand now, if I
raise my hand today, what is the upside for raising
my hand and what is the downside for raising my hand?
I think they look and say, there's very little upside actually,
because the chance of real change in this moment right
(34:44):
now is unlikely. Maybe when we get to an election
or midterms or other things I don't know, and the
chance of it on the downside is high. I mean,
I think that between what we've seen the administration, do
the law firms to universities, paramount CBS story taking stakes
in Intel and other things. I mean, I think there's
(35:06):
real implications if you're a business leader today about how
you approach your job. Every business leader is almost have
to become a politician.
Speaker 3 (35:15):
All right, this is a very journalistic, classic cliche question.
I feel kind of bad, but you're another journalist, so
you know, don't judge me. If you could, I guess,
take away one lesson from the nineteen twenty nine crash
and really emphasize it to politicians, policymakers, regulators, business people, whoever,
what would it be.
Speaker 5 (35:36):
Every financial crisis is a function of one thing, is
leverage in the system. Too much leverage. You actually can
have speculators and all the bad actors you want doing
all the bad things you can imagine on stage, but
it's the leverage that tips it over. And as a result,
(35:57):
you need to have guard rails to prevent that because
the human condition is to want more, right, That's what
the investor class it's I hate to say, the idea
of self regulation is very very difficult. People do not
regulate themselves. They just don't, and so we just need
to be super careful, especially when there are all these
(36:18):
kind of new products being developed and other things. We
don't know where the leverage is. That to me would
be the single biggest thing. And my fear is we're
living in a moment right now actually where some of
those guardrails are almost purposely being taken away.
Speaker 2 (36:34):
Well, we have four years between it for until the
one hundred year anniversary of the nineteen twenty nine crash.
Andrew Osorkin so thrilled to finally have you on the podcast.
The book is a great opportourney. It's really great.
Speaker 4 (36:45):
I really appreciate.
Speaker 2 (36:46):
It's really cool that you did this. Everyone should be
very impressed and everyone should check it out. It's great history.
And I hope it becomes a TV show.
Speaker 4 (36:52):
Thank you. I hope.
Speaker 5 (36:53):
I hope I can come back here in twenty twenty
nine if you have.
Speaker 2 (36:56):
Four for sure, and then twenty third. Yeah, all right,
that Tracy.
Speaker 4 (37:14):
That was a lot of fun.
Speaker 2 (37:15):
I love bubble history. We used to do tons of
more episodes on They're always really fun.
Speaker 3 (37:20):
Well, you know the Florida Land bubble gets mentioned.
Speaker 2 (37:23):
Yeah, we did so a bunch of episodes on that.
And this is really cool. I love all the pop
culture elements, the Winston Churchill, the Groageo marks.
Speaker 3 (37:32):
It's just astrology.
Speaker 2 (37:33):
It's an incredibly rich story. It's incredibly rich piece of history.
Speaker 3 (37:36):
Yeah, and it is funny. You can't avoid thinking about
the parallels. You really can't. When am I getting my
Japanese Exotic Rabbit bubble episode?
Speaker 2 (37:44):
Wait anytime? Was that a bubble? I didn't know about
that apparently?
Speaker 3 (37:48):
And sheep, I want to do New England sheep too.
I want to do all the animal bubbles.
Speaker 2 (37:52):
Let's do it. Let's do them all. Here's the bat
the guano bubble. We've never done an episode on that.
But the one other thing too, is that think like
you know, two thousand and seven, two thousand and eight,
the Great Financial Crisis, that was like a debt bubble,
right There were a bunch of assets that were expected
to pay back at a dollar on the dollar, and
they like paid back at ninety cent and then people
panicked into his a bank.
Speaker 3 (38:12):
There's still a lot of credit tied to it.
Speaker 2 (38:14):
There was a lot of There was definitely the leverage.
Speaker 3 (38:16):
The debt was being used as collateral.
Speaker 2 (38:18):
For the debt was being used as a collateral. But
it was you know, right now, we don't It just
feels like it's a stock story, so I can say
things everyone wants access to the right tail, yeah, whatever,
and everyone wants the big score, et cetera. And that's
what sort of nineteen twenty nine reminds me of this idea,
like different than a sort of like housing bubble, just
this idea like everyone wants those right tail outcomes, including
(38:40):
Winston Churchill and Groad show mark.
Speaker 3 (38:41):
Well, you know the chart that the Doomers always tweet
is the margin debt chart, right, And you know, I
have doubts about that because the margin debt chart goes
up when stocks go up, basically, but it is at
record high.
Speaker 2 (38:53):
So anyway, people should definitely check out this book.
Speaker 3 (38:56):
All right, shall we leave it there?
Speaker 4 (38:57):
Let's leave it there.
Speaker 3 (38:58):
This has been another episode of the All Thoughts Pod.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (39:03):
And I'm Jill Wisenthal. You can follow me at the Stalwart.
Follow our producers Carmen Rodriguez at Kerman armand dash O
Bennett at Dashbod and Kale Brooks at Kalebrooks. For more
odd Lots content, go to Bloomberg dot com Flash Odd
Lots with a daily newsletter. And all of our episodes,
and you can shut about all of these topics twenty
four to seven in our discord discord dot gg slash
(39:23):
od Lots and.
Speaker 3 (39:24):
If you enjoy odd Lots, if you like it when
we talk about the crash of the nineteen twenties, then
please leave us a positive review on your favorite podcast platform.
And remember, if you are a Bloomberg subscriber, you can
listen to all of our episodes absolutely ad free. All
you need to do is find the Bloomberg channel on
Apple Podcasts and follow the instructions there. Thanks for listening
(40:01):
It
Hosts And Creators
Joe Weisenthal
Tracy Alloway
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