Loading summary
Transcript121 lines
- [00:04]
A
Welcome to Lunch with Jamie. Today I am joined by Andrew Ross Sorkin, probably the hardest working person in the entire media business between Squawkbox, DealBook, DealBook Summit is the co creator of Billions, his author of two best selling books Too Big to Fail and most recently 1929. This guy is working 247 for us and we are really lucky to have him. The conversation was great, just what I expected. Somebody wanted to talk for a long time. We talked about Trump obviously. We talked about the AI bubble. We talked about predicting the next stock market crash which I couldn't get him to do. We talked about different parts of his book and how an astrologer was one of the most influential people in the stock market in the 20s. We talked about the Paramount Warner Brothers merger, the dangers of wealth inequality and the surprising person that he really wants to interview. So you enjoy the conversation? I did. And here's my conversation now with Andrew Ross Cuin for the regulars, they know what's coming first. It's always the toughest question of the day. Since this is called Lunch with Jamie and we're not eating lunch. But we're not eating lunch.
- [01:15]
B
Yes.
- [01:15]
A
It has to be discussed.
- [01:16]
B
Yes.
- [01:17]
A
And although there may be some other important topics in the world, we can always comfort ourselves through food. And in doing some research I've learned that there is a chance we're separated at birth because I read an article where you highlighted your love of Stacy's pita chips and Diet Coke. And I like that is we're talking a common language right now. So I've referred to Diet Coke as the nectar of the gods. So it's one of my favorites.
- [01:48]
B
So you're actually. Wow, you found that article. That's unbelievable. So I used to actually when I was writing Too Big to fail. This is now a long time ago, 15 plus years ago, I would go to this bodega every night and I would buy a big bag of Stacy chips. I'd buy a like a six pack, maybe more of Diet Coke or like a liter of Diet Coke. And then I'd also used to buy beer and I'll tell you why, because you'll see what was going on. I would then drink the Diet Coke, stuff myself silly with the Stacy chips to stay up all night to write the book. And then it would be like 4 or 5 in the morning and by the way I need to go to the office in the morning at like maybe 10. And so then I would drink the beer because I was so caffeinated that I needed to Go to sleep. It was a terrible cycle, but I loved every second of it, so I can't really complain.
- [02:44]
A
So you're basically a bastion of health and for all people wanting to learn how to write and to be journalists and to be authors, that was, as
- [02:51]
B
I said, this was 15. No, but this was 15. I did not. I don't do it that way anymore. I still drink a lot of Diet Coke as much as I used to, and unfortunately, I don't eat as many Stacy chips as I'd like to.
- [03:02]
A
Yeah, I'm right there with you. They are addicting. All right, well, now we're going to get into some other topics. So I get so many things to cover with you. And although you are not technically a political journalist, although you, more than you, you could easily add that to your cap.
- [03:22]
B
These days. I feel like every day is like a political story.
- [03:25]
A
It's crazy 100%. And I think we kind of have to start at least and reference Trump's latest post. You know, I think it's on the
- [03:35]
B
one hand, you mean I'm going to kill civilization?
- [03:37]
A
That one, a whole civilization will die tonight, never be brought back again, is the actual quote right? I have one person I stay in touch with who is a Die Hard loyalist Trump supporter, and he told me after the just insane Easter post that, that Trump was playing 3D chess with us and you're all not understanding what he's doing. And then when I post tested this today, he said he meant 5D chess, not 3D chess.
- [04:10]
B
Right. This is the madman theory of the case.
- [04:13]
A
So what do you. I mean, I missed Squawk box today. I try and get up early, but you guys run a little early for us.
- [04:18]
B
Yeah, no, I know, I know. I mean, I don't know what to say. I honestly do not know what to say. I. I don't know what's going to happen tonight. I really don't. There's part of me that thinks that he may ultimately. I mean, the sort of taco trade, the sort of Trump always chickens out that maybe he'll find some way out, he'll claim that there's some kind of reprieve. Maybe he bombs some things but doesn't bomb everything and says he's going to give them more time. I don't know. I don't know. Obviously, I think these, you know, I've covered him for, for years, long before he was the president, back when he was doing real estate deals. And obviously he thinks this is some kind of negotiating tactic. He thinks that by Writing this down. I think he thinks by writing this the way he has that somehow he's going to bring these people to the table. And I think that, by the way, he's probably had some good experience in the past doing that when he was doing real estate deals and other things, threatening that, you know, this was not going to happen or this was. But this is a whole nother level. A whole nother level. And my fear, I don't know if you have this fear. My fear is how quickly you can turn from being the victim of something to being a villain. So I think it's, you know, I think it's very easy to say, look, you know, the US has, has arguably been victimized by Iran over the years in certain ways and other things. And so maybe you could argue that there's a reason to be doing some of the things that he's doing or some of the things that we, the US Are doing. But, you know, if you decimate an entire civilization, as you said, 90 million people, I think all of a sudden we become the villains. I mean, by the way, whatever you think of the situation with Israel and Gaza, you know, that was a situation where, you know, clearly Israel, I think was, was the victim. And, and I like to believe that a lot of people thought that they were the victim. In the beginning, though, obviously, there were certain people who thought they were always a villain, but then a lot of the steps that they took later, there's a perception now we could just debate whether it's right or wrong, but there's a perception that they're the villain for doing what they did. So I think, I don't know. It's a, It's a complicated place. Yeah.
- [06:41]
A
How do you, you know, first of all, I am nervous. We all keep talk Taco concept. And, you know, this guy's got a big ego, and sooner or later, he's just not going to. And he's not going to just because he wants to prove to people that he doesn't know he's chicken out. And I, so I get sort of. I get sort of nervous about that, that concept, but I think he's proven time and time again that's where he kind of gets. But I guess the question that at this point, right. Because you don't want to chase these squirrels that Trump's throwing out every day. But as. And the financial community, how do you guys handle that as journalists? And then how do the, you know, the markets at this point, are they kind of ignoring what he's doing? Are they what, what do they do?
- [07:29]
B
Well, so I think there's a couple, there's a couple of things going on here. One is that the markets, I think investors generally have found, and this relates to war before we get to Trump specifically, have found that, you know, for the last 30 years, crazily enough, if you had actually sold your stocks when this big headline about a war, you've actually been wrong most of the time. Actually, most studies will say that you actually should be buying stocks during a war that historically, over the last 30 years there's almost been these quick V shaped recoveries. And the fundamental question is that was true last 30 years, but is this time different? And there are times, by the way, where, where things are different. And this, you know, when you have an oil shock, that's a different time, for example. So I think part of the conundrum is, you know, the marketplace is such that investors, for the most part, I would say, are professional optimists. And by the way, it's paid to be a professional optimist rather than a professional Cassandra over the years. So a lot of people sort of like to look through whatever the, what they would say is noise. So I get that. And then there's the Trump piece of it, which is thus far. And I don't know if it's a Taqua trade. I always think of him a little bit more of a guy who sort of is willing to push to the edge of the edge and thinks he's always holding this rope, that he can pull it back at the last minute, he can pull it back. And I think you've seen him actually do that in a whole bunch of instances. By the way, tariffs were a good example. When he was making certain arrangements with tariffs with China, market went crazy. He pulled it back early on. He's pulled a whole bunch of things back. War is different because you can't pull it back. You think you're holding onto the rope, but you may not be really holding onto the rope. And so that's the bigger distinction. The market, for whatever reason though, has followed the professional optimist path, I think, which is that somehow on the other side of this, it will be okay. And maybe, by the way, maybe it will. This question is sort of, how long does this all really, really take and what does that even look like?
- [09:38]
A
I want to just step back for a second and talk a little bit about your career and your life. I mean, you've done so many things, as I mentioned in the intro, and you do so many things on a daily Basis. I mean, this new book that you've written, 99 is a must read. And I heard you talking at one point about how challenging it is for you to kind of write and just sort of that process of getting into writing. But when you look, I'm sort of mesmerized how you, how you're able to accomplish what you do in a day and how do you just from a simple standpoint. And I've heard you talk a little bit about this, but like, how do you. How do you fit it in? I mean, what your, Your day when you. Especially when you were writing the book between Dealbook and the Squawk Box and writing like. And being a dad, which is important to you. And I've been like, how did.
- [10:24]
B
What? What?
- [10:25]
A
Like there are not enough hours in the day to be. Andrew.
- [10:27]
B
I was not. I. But let's be honest, I was not managing it well. And it took me a long time to write this book in part because I probably wasn't managing it well. Um, so, you know, I wake up at 4:30 in the morning. I work on DealBook and then go on Squawk and then end up spending most of my day working on Dealbook and all sorts of other things throughout the day with the book. I found myself writing a lot at night, a lot on weekends. I was just on vacation. Happily. It was probably one of the first vacations I'd been on where I didn't write the whole time. I used to sit on the beach or wherever I was with my laptop and my kids thought it was crazy. And I. I loved airplanes. Most people hate airplanes. I love airplanes because I could write on an airplane and I was always big on downloading everything beforehand because I never want to rely on WI Fi. WI Fi to me is on an airplane, obviously, I guess, unless you have Starlink. But. So yeah, that's how I would do it. But I would oftentimes stay up late. I wasn't eating my Stacy chips, but I was drinking Diet Coke. So that's. And just sort of try to compartmentalize. But I also think it's hard to compartmentalize because I would find myself drifting off thinking about different parts of that book for so long.
- [11:37]
A
I thank your family for being supportive of you taking up your vacations.
- [11:43]
B
They're supportive now. I don't think they were supportive.
- [11:46]
A
I am going to help you kick your Diet Coke Coke addiction. Although I still drink it. It is very bad for us, but I drink much less of it. I now. So when, when you think of Everything you've done, I mean, there's so many. There's so many just things to. That are really beyond impressive. But DealBook to me, has now become one of the, you know, arguably the most important summits of the year. I mean, it's like, you know, I genuinely. Whether it's Milken or Davos or DealBook, I mean, it's really. I mean, it's, you know, what was the. What was day one of DealBook like? What was the. What was the hope look?
- [12:25]
B
So I started DealBook, the newsletter, in 2001. And this is really before there were newsletters and before there were blogs and before people were doing that. And so I. We had. I had been doing that from 2001 to basically 2011 called 10 years. And what was amazing about the newsletter was not just what we were writing, hopefully, but also the audience. I mean, I used to get a list every morning of the new people who were subscribing. And the people who are subscribing to this newsletter were crazy. And it was the most insane list you'd ever seen in your life. And so I thought to myself, in 2011, could we somehow bring this whole thing to life, like on a stage? So could you actually see what we're writing about in a real way? And could you do that? And could. Could the kind of conversations that I was having with a lot of the newsmakers and people who, by the way, were subscribing to the newsletter and then they were replying to it in the morning. So I was having these sort of fascinating dialogues with people, but oftentimes off the record, or they were telling me things I, you know, I couldn't attribute to them. But could you have that kind of conversation on the record on a stage? That was really the idea. And we did it in the first one in 2011. You know, I'm trying to think back. It was right after the financial crisis, I think. I think the. The opening conversation was with Jamie Dimon and then Lloyd Blankfein and then Marc Andreessen and Eric Schmidt. He was running Google at the time. So it was an interesting group, I think. Oh, goodness. Who else did we have? Indra Newy. It was a fascinating. She was running PepsiCo at the time anyway. And so I think just over the years, we've now done it. This will be the 15th year of it. It just grew and grew and grew. And what was fascinating about it wasn't just the people on the stage. It was that so many people on the stage were the kind of People who were sitting in the audience and they just wanted to come and watch and to participate in it all. So that's. That's sort of how it built over time. And then, you know, we had, you know, a handful of these sort of. I don't know, these sort of moments that sort of went viral, which then sort of, I think, grew it even bigger on YouTube and places like that.
- [14:41]
A
Well, it's great. And so congratulations to that. Congratulations on Game plan, which you obviously do with Rich, which I love.
- [14:48]
B
Which climb. And that's. That's. That's a. That's a fun. That's a lot of fun. Um, and that's, I think, now in its third, third year we've been doing that.
- [14:56]
A
And you're moving it this year to New York City. That's exciting.
- [14:59]
B
It's coming in. Coming to New York City. It's coming to Fanatics Fest. Yeah, it's going to be. Which I think is going to be really neat.
- [15:04]
A
That's going to be great. All right, let's get into the book a little bit. Everybody should read it. You can listen to it. You can spend 16 hours with Andrew's voice. I went back and forth between my actual hard copy and also the audiobook. Um, you know, I am. You know, we've all talked about the similarities and I've heard you talk about that. I am curious, and this may. May be a tough question to really answer, but, like, is there one thing that you really took away from the book? Is there one thing that shocked you that you hadn't heard people talk about? I mean, I heard you talk about. One of the reasons writing the book is that people kept on kind of referencing the. The. That time period and you didn't have the knowledge of that you wanted.
- [15:47]
B
That's why I. That's why I wrote the book, because I just didn't have the knowledge. But I didn't know enough about it, and so I just wanted to know about it. I wouldn't know who the people were and the characters and what they think. And. No, I think the biggest. I don't know, like, surprise. One thing. I'm only allowed to choose one thing. One thing is that we are no different. That, you know, forget about parallels. It's just we as people. You know, they didn't have the phrase FOMO in 1929, I don't think, but that was the feeling. Everybody had fomo. And that's what I think drives a lot of society in terms of everything we do, whether it's investing or Wanting more or the greed of it all. It's. I think everybody's looking around and they want to figure it out. And that's what was happening in 1929, and that's what's happening today, and that's what's probably going to happen 100 years from now.
- [16:36]
A
You're right. It's not fair to ask you one thing because there's so many things that you could pick. I mean, one of the things. I'd say that. And again, I'm not studied this way in the sort of history and history of finance, but I. I was really surprised just about how the buy now, pay later concept was such a critical and, you know, obviously buying things on credit. But you hear about all these buy now, pay later companies today, and it's like how it's destroying society and it's how it's ruining kids and all these kids. But again, to your point, like, we're still doing it. Like, nothing is. Nothing is new. Like, we haven't learned from any of our mistakes. And. And do you. Do you equate that to some extent to fomo? I mean, again, you saw it in
- [17:20]
B
every crash, like, yeah, everything's about debt, and everyone's always trying to figure out a way to own more things. Look, I'm not. In the end, actually, this is a lesson. Maybe it's related to both of these things. And there's buy now, pay later or things like that. It's not so much that all these new products, financial products, are bad unto themselves. It's actually that sort of a form of innovation. It's just that whenever we do it, for whatever reason, we build these new things, and then they go just a little too far. And for whatever reason, nobody wants to just. Just hold on to, you know, keeping it from going sort of over the edge. And then something. Then we go over the edge, and then we end up getting regulation, which then people say goes too far on the other end. And that's where we. We land. Right.
- [18:13]
A
As I mentioned, there's so many great parts of the book and everybody needs to read it. So I don't want to give away all the juicy moments, but would you do a. Just quickly tell. Tell people who Evangeline Adams was and then also tell me who today's Evangeline Adams is. Ooh.
- [18:30]
B
Okay, so Evangeline Adams is one of my favorite characters in the book. Evangeline Adams, by the way, one of the, almost the only female characters in the book. There weren't a lot of females that were Sort of leading on Wall Street. Evangeline Adams happened to be an astrologer in New York City. Now you might say to yourself, what does an astrologer have to do with this? She was not just a famous astrologer. Every Wall street banker and trader would go visit her, including JP Morgan, to find out whether they should buy or sell their stocks. I mean, seriously, she would charge $50 an hour, which was an extraordinary amount of money. She had lines out the door. She had an office of Carnegie Hall. She had. I have my dealbook newsletter. She had a newsletter. She had 100,000 people subscribing to this newsletter of hers to tell you what to do. And she was telling people at the time that, you know, everything was going to the. To the moon in terms of stocks and everything else. And so that's of course. And people followed her and made a big mistake. But she was. She was character, real character.
- [19:32]
A
So who. Who's today's Angela being Angelina Adams? Who. Who do you. I mean.
- [19:36]
B
Well, so I don't think there's an astrol. There's no. I. I pray that there's no astrologer. They're probably like performance coaches. There's a, you know, there's a little bit of like a. A Wendy Rhodes, billions in her. I don't know who.
- [19:50]
A
But you talk to them. You talk to the biggest CEOs in the world and whether it's.
- [19:55]
B
It's more like they, they. I mean, they probably talk to performance coaches like Tony Robbins. There are people like that. I don't know if there's somebody that they look to to figure out who to buy stocks or maybe like they look at like a Poltit or Jones or there's certain sort of business people that they look at. But was so unusual, I think then was this whole idea that sort of Evangeline was going to tell you where. Where to go.
- [20:21]
A
Right. Listen, I just did. I did. I asked my friend Claude. It said it's that 50.929 is about a thousand dollars an hour today. I. Actually sounds pretty cheap actually for if it's JP Morgan getting his advice for what stocks to buy, I mean, it's kind of a steal in many ways.
- [20:36]
B
Sure. I mean, it's just crazy to think that you were going to ask the astrologer what to do.
- [20:41]
A
But you know what was interesting, which I don't. You know, I don't know why it surprised me, but the other thing I noticed in the book is that you reference at that time was really the time when these guys, and mostly guys only guys, became really celebrities. And it was the birth of kind of that. Now today we all think of, you know, all of these, you know, billionaires are all just as big names. You know, when Jeff Bezos or Elon Musk or Sam Altman walk in a room, it's just like, you know, any top entertainer. You referenced Charlie Chaplin and Babe Ruth. Truth. Has that. Has that shifted over time? Were there eras since the 1930s where sort of they, they. They no longer were kind of famous in that. In that way? Or has it been kind of peaks and valleys? Or is it sort of.
- [21:29]
B
No, it really was. That was. That was really when it happened. And then I think it stayed there. But I think prior to that, it just didn't. Just didn't exist. So Time magazine didn't exist till 1923. Forbes magazine showed up on the scene 1917. Businessweek magazine shows up, by the way, in 19. So those publications, just New Yorker, I think, was 1926 or 27. So, yeah, the whole just the magazine scene, I think, really is the thing that sort of turned these people into celebrities and the sort of cult of celebrity around CEOs. Charlie Mitchell, who's the main character of the book that I wrote, ran a bank called National City, which becomes Citigroup. He was literally on the COVID of everything. In the same way as you said that an Elon or a Jamie Dimon or someone, by the way, had just written, I think, into the notes of Buffet. And that's probably right. People think of Buffett as almost an astrologer of source.
- [22:34]
A
He is one of one. All right, let's get into AI for a bit. We just had. Last week, we had. I don't know if you've seen the extraordinary AI doc yet. That was done by Daniel Rohr.
- [22:48]
B
I keep hearing about it, and I have to see it. I have to see it.
- [22:51]
A
So we had one of the producers, Jonathan Wong and Tristan Harris, who you probably have interviewed.
- [22:56]
B
Yes, I know. Yeah.
- [22:57]
A
Who's amazing. You know, at this point, you've pretty much interviewed everybody there is to interview in the world. And I'm sure you've now interviewed or been on conversations with Sam and Dario and everybody in the AI space. Some of them talk a good game. You know, Sam even came out with OpenAI, came out with some new, you know, thoughts on regulations and whatnot, but sort of the status quo kind of continues. Dario obviously stepped up and it actually. And it really helped him, which is interesting that more people aren't in the business world aren't doing that. But do you think that they're. They're really genuinely concerned about all of these issues that are related to AI and they're just like, we're just going to keep pushing forward because we have to win this arms race. Or, or do you think they sort of, they're, they're just so focused on, I want to beat Elon to be the first trillionaire, or I want to be the. I want to create the greatest AI tool ever. And I'm, I, whatever. Whatever is in my wake. I don't really care. It's hard to lump them all together. I guess it's not really fair.
- [23:57]
B
I think it's a combination of things. I think that, for example, I think, I don't know, I want to say, I think OpenAI. I think, look, I think OpenAI started out obviously caring deeply about the sort of safety issue, but it was more, by the way, the safety issue was we need to have a competitor to Google. I mean, that's what they really were trying to do at the time. Elon wanted a competitor to Google, Sam wanted a competitor to Google. I think Dario seriously cares about the safety stuff. What I think is interesting is once you get into this sort of competitive state, which is what they're in now, I think some of the safety stuff, even for anthropic, is going a little bit out the window. I mean, I think that's clear. And I think part of it is a sense, I'll say this more about OpenAI than anthropic. There's sort of like a terminal value. I think that somebody like a SAM or people at an OpenAI would say, look, this is going to happen. By the way, it was sort of the argument around when, when they were allowing people to do effectively deep fakes in sora. And the, the argument was like, this is going to happen anyway, so we're just going to let people do this because it's going to happen. So we can either let it happen today or we can let it happen three years from now. And so I think that's a little bit of the, the attitude, which I think is scary. I do think is scary, but I don't know what the, I don't know what the implications are, but I think part of what those who are not probably taking this, the safety stuff as seriously as maybe we'd say we want them to is they say nobody really knows what's going to happen. And so the only way we're going to find out is to actually do It. Right. Yeah. That's not a defense of it. It's just. I think that's the sort of mindset of it all.
- [25:45]
A
And do you sort of buy into this argument? Well, listen, if we're not going to do it, then China's going to do it. So we just got to keep pushing on. We can't let them be done.
- [25:54]
B
I think that that is. I think that drives a lot of it. I think what drives a lot of it is this is going to happen. It's happening anyway. Either we're going to do it or somebody else is going to do it. And maybe we can do it marginally more safely than that. They can do it. And if we're not out there, then we've lost the game anyway.
- [26:09]
A
I think one of the things that's frustrating is, you know, and this, this documentary is one of the reasons that it's so important is that if you look at nuclear war, you know, there was this film the day after that. It was like the most watched film of all time, 100 million people watching. And that was the thing that really woke everybody up. And, and ultimately Russia, United States, all these countries had to work together so that we wouldn't have another nuclear event. And it feels like Dario and Sam and Google and Elon, all these people kind of could get together and just say, hey, guys, like, we got to go talk to the people in China, talk to the people in the other countries and say, we're going to come together and, you know, the government's not going to do it because they don't know how. They don't know what they're talking about either, because how are the average senator supposed to know what to do? I mean, I think we. That's the unfair thing we put on our elected officials that, like, oh, you're an elected official, you should just know everything about everything, and you should be able to understand how it works and make sure it's. There's guardrails around it. But these guys know what the issues are. I mean, we see from the papers that when the release, when the metadata comes out and you see these people, everybody knows what, what it can do to some extent, right. And knows the potential issues.
- [27:18]
B
And I think it would be very hard for them to all get together with all of their competitor and all these different countries, in part because all these other countries, including China, so most of these, these companies in other countries are basically run by the countries, you know what I mean? So it becomes you're. You're basically negotiating almost a Political. Yeah. Story. And I think it just, I, I get the argument, but I think it's, it's so hard to think how that, how that could ever happen. And the truth is, you know, you just named Elon, Dario, Sam and Demis. And I can tell you, even to get those four together, forget about China and the US get those four in
- [27:59]
A
a room, we can get them on the. Maybe they want.
- [28:04]
B
That's not a courtroom. And maybe they should be in the
- [28:08]
A
UFC ring on the White House lawn this summer. And that could be the winner of that gets to win the AI war.
- [28:16]
B
Still, you know, Mark was supposed to be there with Elon at some point, right? Whatever happened to that? Yeah, 100.
- [28:22]
A
I heard you talk about that. And everybody talks about this kind of that. There's a handful of stocks, whatever. It's the seven. It's the right 10 propping, propping up the entire market today. And if you took that away, the market would have been flat. I always started thinking again, and back in history, isn't that just sort of how the stock market has worked in some ways since the birth of the stock market? Like, aren't there. Isn't there a sector that everybody gets kind of excited about?
- [28:50]
B
Totally. And by the way, in 1929, by the way, it was radio. Everybody was fascinated with radio. That was like the hot technology of the time. And a company called RCA was the Nvidia of its time in that way. But yes and no in the following way. The concentration of the index. So the s and P500, if we're just talking about seven or 10 stocks, and that's like literally where most of the gains are coming from. I don't think we've had. Ever had that. I think we might have had 20 or 30 or 40 stocks that have sort of bolstered or taken down by the way, the index. But I think the idea that we're really in like a handful, like you can almost count them on a hand, that is more complicated and also therefore creates more risk because it obviously means that if any of those five, seven falter, you've got a much bigger problem.
- [29:44]
A
So is that the difference between today and the last tech bubble or the last kind of crashes we've seen, or in 1929 again, is that the major difference?
- [29:55]
B
I think the biggest difference today is the concentration, the concentration level. And then of course, today the other big difference is just where the debt in the system is. Historically, the debt in the system was in banks. And today you're probably reading about all these stories about the private credit market. Now, it's in this sort of shadow banking system where we don't have the true transparency of what's really happening.
- [30:19]
A
How you're not Evangeline Adams.
- [30:23]
B
Oh, now I gotta get my crystal ball out.
- [30:25]
A
You gotta get your crystal ball, Andrew. Get your crystal ball out.
- [30:27]
B
Get your crystal ball. Ball. I have a crystal ball over here.
- [30:29]
A
We. It's fair to say everybody knows that we're. We're. There's a. There is a. There is some correction coming. Nobody, except maybe Evangeline, could predict it. But would you be. I guess the question maybe is, would you be as surprised if a crash occurs tomorrow as it does in six months, as it does in two years? Do you think it's. It's more imminent? Do you have, like. I don't want. I, I.
- [30:58]
B
Well, no. Okay, so look, I would have said to you three or four months ago, I would have said to you, I think we are still 12 to 24 months before a major correction, unless we get sort of marginal corrections along the way before another major correction. And the reason is, I thought to myself that what was happening with the AI boom and the amount of debt that was just flooding into that system, that. That was still sort of 12 to 18, 24 months away from becoming a potential problem. What I don't know is I had Iran was not on my bingo card. It just wasn't. And so, and I. And this, this end of civilization idea was definitely not on the bingo card. So what I don't know is, you know, if that turns into a real problem over the next. And it's already a problem, but if it, if it spirals out of control and you have a real oil shock and that continues for many, many months, that'll have a real impact on the economy, and that'll hit everything. One of the things so interesting is that because of this sort of continued investment in AI, it has actually supported just about everything else. And when I say that people don't. They always. I think they often think, oh, well, you're just talking about, like, Microsoft's going to do well or Amazon's going to do well. It's not that. It's that the AI, the AI money is trickling through everything. It's trickling into real estate, it's into the energy markets, it's into the construction. It touches everything. It's not like it's just really concentrated in one or two companies. The money really does flow through the economy in certain ways.
- [32:39]
A
Do you think we look at AI, I mean, Obviously nobody is doing enough to prepare for what's coming. You know, we all know the job losses are going to be catastrophic, significant over the term you want to use. And people always talk about, obviously in history we've looked at these technological advances and we've come out the other end ahead and more prosperous and more successful. I'm the eternal optimist, so I lean in that part of the world. But I curious, and you obviously been talking about this a lot recently as well. Are you now at a place where you feel totally differently and this is just such different technology that there is a chance we can't come back? And do you think people, how do you get people to focus more on it?
- [33:35]
B
Well, so look, I'm actually the eternal optimist too. I'm worried deeply about this. I don't think it's a forever thing. I think there's going to be the transition pain, though, I think is going to be real. And the question is, how long is that transition pain take before we actually find these other jobs and find these other opportunities that come from it? You know, the idea that we can all sit in the back of a, a Waymo ostensibly means you should be more efficient because you can have more time to do other work in the back of your Waymo. I know, I know it sounds crazy, but like that's part of the, the equation. And then, but then you're going to say, well, but then there's no taxi drivers. But then the question is, what are those tax drivers going to do? And I think that we have to find opportunities for them. I'm not so Pollyanna to think that this is easy, but I think ultimately all of this is going to be to the good. But I think there could be, it could be like a 10 or 20 year period that's really, really tough. And I don't know what that looks like. And I don't know how my optimism is not rooted in some specific thing that I can say to you, oh, here's how it's going to work. My optimism is in sort of humanity and our ability to adapt and to try to find new ways to make things work out for us. And then the other question, and this is the part that I'm probably less optimistic about, is to the degree you believe the spoils of all this ultimately just go to the AI companies and that there's no version of sort of redistribution of it and that there's no competition, that's the other piece of this. And we've just sort of come to a regulatory state. I'm not, I don't love regulation for the sake of regulation. But you know, we could have three or four or five big AI companies that could basically collect everything. And if that's the case, that's, that's a totally other problem too.
- [35:28]
A
Yeah, I had somebody I was talking to the other day brought us a really interesting about AI, which is AI in many ways today is actually not making life easier and taking time and saving you time because it's really just doing a lot of things you wouldn't normally do. Like I, like I've been spending time on my, on my health when it comes to getting Claude to help me, thinking about my workouts and nutrition, all that. And I'm spending hours dumping all this information that I would have never have. I've lost those hours though. I can't get them back. And in theory maybe it's making my life easier, making life better. I mean the thing that I'm most concerned about it because again, I do think in the long run I think there's that, that there's a real benefit. But I do. The place that concerns me the most is what's going to happen to that training period, what's going to happen to that next crop of people. I'm in. You know, I've seen Sam Harris talk about this, I've seen Scott Galloway. I am actually bullish on
- [36:29]
B
like a
- [36:30]
A
college education today more than ever, even even a liberal arts education because I do think the ability to be able to tell stories, be able to express a narrative, be able to have critical thinking even when you're talking to your AI agent is really critical. Like to be able to use it properly. You can't just go into an AI and actually just type something and it's going to just do wonders for you. You have to be very thoughtful about how you use it and how there's nuances and sure, maybe that will change, but the big challenge is really going to come to that. The people who are the young lawyers or the accountants or the young doctors or people who would be normally getting trained, the young financial analysts. Why would you hire a financial analyst right now when you could dump in a deck and P L and whatever other numbers and within five minutes have all that data that would have taken some poor MBA or person out of school, 24 hours of non stop work, pounding Diet Coke to answer it. So how do you train those people? And that no one seems to be really putting a lot of effort and talking to that. And that's the thing that scares me,
- [37:41]
B
I think so I don't disagree with you. I think that's what is happening. The one thing that I have found. I don't know if you found this is. And I play with this stuff all day long like a crazy person. The amount of time it takes to actually check it all, to check that it's actually right, is actually a lot. It's not. So it saves time in certain ways. But at least for me, I found that for every time I'm actually trying to say real, the amount of second guessing and checking that I'm having to do now. I guess if you were a managing director at some bank and you asked your analysts to put together a deck for you, I don't know, how much of the time do you think that then you're sitting there checking everything that they're doing. And now let's say you don't have your analyst anymore, but you just. So you just prompted to make the deck for you. Are you spending the same amount of time? Are you spending less? Like, what does that actually really look like? I think it's a much more complicated, nuanced answer than we're probably prepared to think.
- [38:59]
A
Yeah, listen, I think you're totally right. I mean, if you wanted to I write a newsletter, I could have my newsletter written, 90% of it, and it would be great. And that other 10%, people would look at me like I was a crazy person because it would have such nonsense in there. They'd be like, I'm never looking at this ever again because this person doesn't know what they're talking about. Totally. And that doesn't, that doesn't work. When you want to be great, when you want a successful company, when you're a successful media company, a financial company, you can't have those errors. So, you know, that's, that's the optimistic way to look at it. I mean, we're gonna, you know, I don't think it ever gets to 100 accuracy, so.
- [39:35]
B
And I'm not even talking about hallucinations. I'm just saying, you know, it's like I remember Sam once saying to me that he thought he. He thought of. And maybe his view of this changed probably about a year, year or two ago. He said that AI was sort of at the level of what he called a competent intern, which I thought was sort of interesting.
- [39:54]
A
I'm not, you know, I think that's a. That's a definitely a. I think an accurate way to describe it. Let's. I want to get A few more topics before I let you go. Prediction markets, they scare me so much. I think that, you know, Kalshi and Polymarket and these things, although they obviously do a good job of predicting things and they are probably the most accurate thing we're working with now. It's really scary and the corruption is rampant and there's no reason it's not going to get worse. I don't know how you limit it and regulate it, but whether you're betting on what song Justin Bieber is going to play at his opening song of Coachella or you're going to the length of the. The super bowl performance or you're when we're going to. And then the other extreme, are we going to go, you know, bomb Iran? Do you think there's any way to regulate them properly or to really put in guard rails?
- [40:58]
B
Well, before that, let me address. Because someone just put in CNBC is an investor, which is true in Kalshi doesn't change my view of. Of all this. Let me just tell you my own personal view of it. I have very mixed views of it. I'm actually interested in the signal from it. Meaning I find the signal that's coming from these things fascinating and I think sort of educational and very interesting in terms of trying to understand the public discourse and what's happening. I think I have a lot of the same fears that you do about insider trading, about how do you regulate it, about what should be what you should be able to trade or not trade. I mean, I agree with you. I think it's wild to think that you could trade on what this song that Bad Bunny is going to sing at the first song at the super bowl or whatever Justin Bieber is going to do. And the question to me is not just is it silly that you can bet on that. It's then the question is if you happen to be working at the concession stand in the stadium and happen to be there during the rehearsal and you saw that or you happen to be a dancer in the thing or I don't know, someone who just happens to be. To know the answer, can you trade on. Because you don't have any fiduciary duty to anybody technically. Now I would think you shouldn't be allowed to do that. I would regulate it in a way that that's. But I don't know how you could ever actually do that. And who's going to patrol all this? So those are the things that I worry about. Obviously. I also find it gross and disgusting that you could trade on whether someone's going to get killed or taken over or this or that. And the other piece of it that's very complicated is, I mean, I know we talk about the can it be manipulated or whatnot. The other piece of it is there are investors today who are using it as a hedging mechanism. So they might be like long something in the stock market, let's say, or maybe they're long oil, they own a lot of oil and they want to hedge that. And so now they're betting against some trade about Iran on Kalshi, for example, or polymarket. That trade in the prediction market is ostensibly ruining the signal. So here I was telling you the signals are coming out. But if people are using it to hedge, it means that actually they're betting the opposite of what they actually think is supposed to happen, which is not really what's supposed to happen in these markets. So that's why I said I have a very mixed view of the whole thing. I do think the information that's coming out of them is pretty interesting. And I don't think that they're so manipulatable so easily. Clearly, I think on an individual basis they're manipulatable, meaning like if you know the Bad Bunny song. Right. So I don't know. I really don't know. I wonder what it says, though, about culture, like the larger question. But I also felt this way a little bit about sports betting. The number of people, by the way, the night of the Oscars, the number of people in the business at the Academy, in the, in the sitting in the place who were making bets on Kalsheet about who was going to win the Oscar. Now, they didn't really know, but they also, by the way, they probably knew some of the people who voted. I don't know. What do you think of that?
- [44:29]
A
Yeah, no, I, listen, I think it's, it's dangerous. I think there needs to be more regulations and it needs to be done now. I mean, you know, similar to A.I. you know, people need to be instituting regulations now. We need to stop talking about it. The people in Congress need to. When it comes to prediction markets, you got to stop saying we don't know exactly. Just try something, just do, do something. And sure, maybe it will, you know, you'll do the wrong thing. But we, we, at this point, we got to stop having this answer. Well, we're not sure. We don't know exactly how you're seeing bad things happening, and you need to kind of start trying to do things
- [45:02]
B
but see, this goes back to the idea of, like, what this goes to, like, new financial products. Every time we build these new financial products, we don't build them with the regulations. You don't have the comp. You don't have, you know, we, we don't have a company out there that said, look, we're going to be the responsible player in this space and we're not going to allow you to bet on this. And we're going to do this and have all these vetting systems. And the reason they're not doing that is because they know that if they do it over there and their competitor is not doing that, then they're going to lose business to that competitor. And so they'll get sort of snaps from people like us. But we're not the ones not trading. We're not. We're not. We're not trading. So it's the sort of economics of it, unfortunately, lead ultimately, I think, often to some, Some bad, bad decisions.
- [45:43]
A
Yeah. I mean, listen, I think there's, there's, there, there are certain things that we know that are just wrong.
- [45:48]
B
Right.
- [45:48]
A
If you're vetting on someone who's going to get a bomb being dropped or murder, you know, it's like that's just not, that's just not up for debate. I think you're right. Obviously, we, there's aspects of growth that we need to happen. Let's, let's talk about the Hollywood industry for a second.
- [46:04]
B
Oh, please.
- [46:04]
A
Yeah.
- [46:05]
B
Where you live?
- [46:06]
A
Yes, where you live. You're a big, you're a big Hollywood guy. You know, listen, creating TV shows, that's, that's, that's not, that's not easy making movies. I am very against the Paramount acquisition of Warner Brothers. I've said it publicly. I think it does nothing, nothing good for anybody. It's only bad. I actually asked Claude to come up with answers of what look at the other side and come up with good answers of why it would be helpful and beneficial. And it said, the quote was, it's very thin. The answers are very thin of what's why. This is a positive thing to happen. Kara Swisher told me to get over myself. And consolidation is happening and there's nothing you can do about it.
- [46:46]
B
A.
- [46:46]
A
Do you think the, the acquisition will go through? Do you think it is ultimately critical for the success of these companies? What's your take?
- [46:55]
B
A couple things. So one piece of history that I think gets forgotten all the time is the Time Warner has been a hot potato for years. I mean, like for as long as I can remember. Att, obviously, AOL before that. I mean, it's. It's gone through its own permutations. So the idea that it's somehow this. It's vaunted. But this. This. This sort of vaunted independent entity is not really been the case for a very, very long time. I do think consolidation is going to happen. I do think the deal will get approved, I imagine. I think it's probably gonna. Look, I think it's gonna be tough for Paramount given the amount of debt that it's gonna have on its books. I think it's gonna be. That's gonna be a real challenge. Do I think it's better for the business? I think it's gonna. As I said, I think. I think it was tough for Paramount before. I think it'd be tough for Paramount after. They make their life easier, maybe on the. Maybe on the margins. The question is also, what would have happened to Time Warner on its own? I don't know. Look, I think that the whole industry is going through a really challenging period. So I'm not here to tell you that it's. It's going to be. That's going to be great. I also just wonder. Part of it, though, is. And this may. This is a little bit of the history piece of it the last couple of years, Pre. Call it 2020. So think Covid, but really, writers strike, maybe from. Call it 2000, what, 14 to 20. The question is, I think people are, like, yearning for that period of time. And the question is that that was maybe an historical aberration in the number of dramas that were being produced and comedies that were produced because of all the money going into streaming. It wasn't a profitable way to do it. So I don't know. But having said that, I think the economics of the business have really moved away from the creators and obviously much more to the industry. But even the industry itself hasn't figured it out because it's not like those companies are making so much money either anymore.
- [49:10]
A
Yeah, I mean, listen, I'm against it, but I'm also. I think it's critical the government gets involved, that we get federal tax incentives, that we institute FinCEN. Again, I think there's things that need to happen in conjunction with it, and I think Warner Brothers needs to step up and sell the businesses it needs to sell, and it has robust parts of the business that it can double down on. And yes, you're right, it has been a hot potato, but that's not the reason that it should be allowed to be acquired just because it's made some more bad decisions?
- [49:39]
B
Oh, I'm not saying no. I'm not making that argument at all. I'm just suggesting that. I think that all these companies are going to be somewhat challenged in large part because the cable bundle is coming undone and the economics that have sort of underpinned these businesses for so long is coming undone.
- [49:56]
A
Yeah. I want to get to a couple of questions I had from the audience. You, Pamela Frank, asked. You talked to the most powerful people in the world. Who actually impresses you today? Like who? And who do you get excited about talking to? And is there somebody out there? Do you have a. An interview you haven't been able to get that you really want?
- [50:19]
B
Something that impresses me as a business person, I am always, I'll be honest, I'm always impressed with Jamie Dimon. I just always am. I think he's one of the more sort of honest brokers out there. I'm interested. Intriguingly, I'm impressed with Ken Griffin, interestingly, because Ken, he's on the other side of the political aisle, but he's been more honest than most about a lot of things. I'm fascinated by what Jeff Bezos is doing. I've always been fascinated by that, and I always am fast. Anytime I can have an interview or conversation with Elon Musk, it's a win. And it's a win because he engages, Meaning sometimes you do an interview and someone's got their talking points or this or that. I think one of the reasons that people like an interview with or even just listening to him is sometimes it can be like weird, awkward silence. You know, you ask a question, there's like this strange silence. Doesn't answer the question because he's actually trying to grapple with the question. You may not like the answer, but he's trying to grapple with the question. So I, you know, all those guys I find fascinating people that I would love to interview. I have tried and without success, tried to interview Taylor Swift for quite some time. So if you can get me to Taylor, Taylor for the win. Taylor or. And I'm go. I actually know her and I'm going on her podcast, Oprah. I've never, I've been on. I guess I'm going to be on the other side of the interview. But I've never interviewed Oprah.
- [51:56]
A
Have you asked Taylor?
- [51:58]
B
I have, but DealBook has always been while she actually had, like, the eras tour going and all these other things. So one day I'm Going to maybe
- [52:07]
A
after, maybe after her honeymoon this year she'll come on deal book I my, by the way my white whale interviews are Jamie D. Jamie Dimon is up there as I cannot get this guy and he is like, he's just awesome. I also am trying to get Malcolm Gladwell and Yuval Harari so anybody who can help me get those guys, those, those are those people I want to interview my one of our, our mutual connections, Alan Petroff, my father, the great Alan Patrick. His question was what impact of any will such extraordinary wealth concentrated on a limited number of people have on society.
- [52:46]
B
Alan knows the answer. It's gonna be terrible. I don't, I don't and not just terrible. It's what has led to civil wars. It's what's led to what happened in Germany. I mean it when you have it like drastic inequality that's when terrible, terrible things happen because people do terrible and crazy things. And so that's what I worry about. And I think we're sort of, I don't want to say we're there but we're, we're in a period. We're in a period.
- [53:17]
A
Why do you think some of these titans don't appear to be more worried about that? I mean you know, some of the sort of people on the Forbes, you know list don't, aren't. Doesn't always correlate to the most generous people. Most people give away the most percentage of their wealth and there are tons of people obviously were very generous. So I don't want to say that. Yeah but it seems like it's a pretty simple thing to say hey, you know, I've made a lot of money, I've been successful. I'm just going to give some more of it away and figure out ways to you know, help with income equality or areas like Kelly runs baby to baby obviously as, as you know.
- [53:52]
B
Yeah.
- [53:52]
A
And she's amazing by the way. Extraordinary work that they do and it's just like I'm going to give a little money money to them. I'm going to get kids diapers. I'm gonna, it doesn't seem to correlate kind of always one to one and what do you do you have any reason why you.
- [54:06]
B
I think some of it's short sighted. I think some of the people that you know, big names who are not as philanthropic think that the work that they're doing is either more important or that they're really good at what they do and they're not really good at the other thing. I mean, for many years, Warren Buffett never gave away any money. And people thought that he was. People had a very negative view of what he was doing. And he used to say, look, the thing I'm good at is compounding money as an investor. I don't know if I'm good at giving it away. And for whatever reason, giving it away didn't interest him. And so he gave it to Bill Gates basically and is now giving it to his kids to give away. You know, I think if you were to ask Elon Musk why he hasn't given more money away, he'd say, look, I'm spending. I think the future of my life is figuring out this space thing. That's the game. I will figure that out, that's all. And I'll spend every last dollar. And he thinks of that almost as a philanthropy. I mean, he thinks this is like philanthropic for the country. So I do think there's some people in that space and I think there's a whole bunch of other people who are just very short sighted and frankly, selfish. I think, by the way, it's less about giving and more about what's happened. I think that I fear in our country is that so much of Washington's been bought and paid for that we don't have the regulatory apparatus that makes sense for the country. We don't have a tax system that makes sense for the country in part because we have people who are trying to buy off the politics, bribing, driving politicians effectively so that the taxes aren't one way or the other. And that to me is a much bigger issue that I think we have to resolve.
- [56:02]
A
And that's not to defend not giving away money, but you know, if you read Ezra Klein's book and you think about the inefficiencies of some nonprofits and, and government overall amount of waste like there is that argument. Now that being said, you know, Baby two Baby does an extraordinary job of, you know, putting your money to work for the people it needs to affect. And there's a lot of other great organizations out there. So I, that, that does concern me and I don't know why, but it's
- [56:30]
B
like a Rorschach test. I was, somebody was mentioning Jeff Bezos's ex wife to me the other day and how she gives away an extraordinary amount of money almost without strings, doesn't do anything public about it or anything and just gives it out. And they were telling me about, I guess I don't know the specifics that some of the, some of the donations she's given haven't really worked out, or they've been given the wrong places or this. And it was like a Rorschach test because they were basically saying, oh, look, see how hard it is to do? And then other people would look and say, that's the way to do it. And so it's sort of a really, it's, it's so interesting just sort of how people even think about philanthropy today.
- [57:11]
A
Yeah, yeah, it's tough. All right, final question, because I like to leave on action, but I also, as the eternal optimist, which I love to hear you are as well, gotta
- [57:23]
B
be
- [57:26]
A
make the case in why you're bullish on America today, both as a country to live in and the economy, even with some of these sort of very scary things that we're facing. Or. And are you. I mean, I, you know, I don't want to, I don't want to put it.
- [57:43]
B
No, I, I am. I think, look, I think this country, for some reason, I don't, I do not think that is preordained somehow that this country has to win. But I think there's still this dynamism, dynamism in this country. I think when you look at where the next great technologies are coming from, the new stuff continues to come from here. It's not coming from other places. I think that we have created a pretty great sort of network effect of talented people who want to be here, who see opportunity. I think we do have most of the incentives, right, to a large degree in terms of how some of it works. Our capitalistic system, I think, does work in many ways, but I still think there's. As I said, I also am optimistic that we can fine tune that system to make it even better.
- [58:38]
A
Yeah, I'm bullish and optimistic. If you want to be born somewhere today, you'll be. Want to be born in America still. It's the country with the greatest opportunity. We are a never ending experiment that makes things make some great choices and some bad choices. And over the course of time, it appears we kind of learn from choices and society continues to bend in the right direction. And all these things are kind of cyclical. I mean, you proved in your book and not to. It's unique and singular in many ways. But at the same time, you could look at a lot of other times in the history of America where people felt like it was the end of the society, end of the world. I mean, the situation in D.C. is awful. You know, listen, in 1834, I think it was the last time there was a duel in Congress, you know, so we haven't seen a duel. We have seen our soon to be what's Mark Wayne Mullen.
- [59:40]
B
Oh, right, yeah. We had an almost duel.
- [59:43]
A
We had almost fist fight, you know, but like, you know, it wasn't a duel. So listen, we're still, we're moving forward, you know, we're progressing forward still. So I'm optimistic. Andrew and I just want to thank you again for joining us.
- [59:55]
B
Thank you.
- [59:56]
A
Thank you.
- [59:56]
B
Nice to be with another optimist.
- [59:58]
A
It's good to see you.
- [59:58]
B
Thank you. I appreciate it.
- [60:00]
A
Look forward to seeing you again soon.
- [60:01]
B
Yeah. And hope to see you in person. Thanks, everybody. All right.
- [60:04]
A
Bye, everybody.
- [60:05]
B
Bye.
- [60:10]
A
Thanks for tuning in to this week's episode of Lunch with Jamie. As always, be sure to subscribe to my newsletter@jamieslist.com for my thoughts on all things food, pop culture, politics and more. And remember to join these online conversations and ask my guests questions in real time. Sign up to become a paid subscriber. You can listen on Apple Podcasts, Spotify or Audible and be sure to leave a review. Thanks and see you next time.