Andrew Ross Sorkin on the Stock Market Crash That Shattered America

Summary

Odd Lots Podcast Summary

Episode: Andrew Ross Sorkin on the Stock Market Crash That Shattered America
Date: October 13, 2025
Hosts: Joe Weisenthal & Tracy Alloway (Bloomberg)
Guest: Andrew Ross Sorkin, journalist and author of 1929: Inside the Greatest Crash in History and How It Shattered a Nation

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Episode Overview

In this episode, Joe Weisenthal and Tracy Alloway dive into the lessons, personalities, and enduring legacies of the 1929 stock market crash with Andrew Ross Sorkin, whose new book explores the crash’s human drama and societal impact. The conversation moves from the texture of the roaring '20s boom, through the devastation of the crash, examining historic parallels with today’s financial culture, regulatory environment, technological change, and the psychology of speculation. Sorkin shares his research journey, insights into leading figures of the era, and reflects on the nature of financial crises.

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Key Discussion Points & Insights

1. The Cultural Shift Toward Speculation

• The hosts open by observing that financial speculation has become pop culture in today’s society, similar to the 1920s:
  • "It's a culture of lines, lines going up. People watch the lines." (Tracy Alloway, 02:15)
• Sorkin draws parallels between the normalization of stock speculation then and now, noting how in both eras, buying stocks became accessible and part of daily conversation.

2. Why Revisit the 1929 Crash?

• Sorkin describes his motivation to write a more character-driven, human, granular account of the 1929 crash:
  • “Why can't I understand who the characters are? Like, what were they saying, what were their motivations, who was sleeping with who, what was really happening here?” (Andrew Ross Sorkin, 04:37)
• He aimed to make the events and people of 1929 as vivid as modern financial stories, despite the difficulty of sourcing archives and direct testimony.

3. The Key Characters of 1929

• Sorkin highlights three main figures:
  • Charles “Charlie” Mitchell: Head of National City (future Citigroup), creator of mass retail leverage for stock buying, difficult to research due to limited archives.
    • “He effectively invented sort of modern credit for lending... to go and buy stock.” (Andrew Ross Sorkin, 07:09)
  • John J. Raskob: Compared to Elon Musk for his visionary influence and risk taking; advocated for consumer credit, the 5-day work week, and grand projects like the Empire State Building.
  • Carter Glass: Senator, namesake of Glass-Steagall Act, vocal critic of Mitchell’s leverage-driven finance—likened to an Elizabeth Warren figure.

4. The 1920s Financial Boom & Modern Parallels

• The hosts and Sorkin explore how new forms of consumer credit and retail leverage fueled market mania, drawing parallels to crypto, meme stocks, and today’s AI:
  • “Brokerages were springing up on the corners of streets. The way they're like Starbucks in New York City.” (Sorkin, 09:53)
  • The age’s "Nvidia" was RCA, driven not just by technology but by explosive, unchecked hype.

5. Information, Technology, & Disruption

• Sorkin describes how, in 1929, trading infrastructure lagged behind explosion in retail trading—news and pricing were hours out of date, information asymmetry was rampant.
  • “You could be looking at the board thinking...what the prices of the stock is, but it would literally be hours off.” (Sorkin, 27:31)
  • Jesse Livermore, the era’s most legendary trader, built advanced private phone lines for information advantage (the “Ken Griffin” of his day).

6. Human Drama & Pop Culture Crossovers

• Notable personalities like Winston Churchill (obsessed with margin trading) and Groucho Marx (lost his house to margin calls) feature in Sorkin’s book and the conversation, underlining how ubiquitous and intoxicating the bull market became.
  • “Winston Churchill shows up in New York...down on the floor of the stock exchange...he ends up losing money. Of course, like everybody else.” (Sorkin, 13:22)
  • This human angle grounds the crash’s historic scale in relatable terms.

7. Crisis, Leverage, and Regulatory Lessons

• Sorkin, Alloway, and Weisenthal probe why the crash led to the Great Depression—bad policy responses (tariffs, lack of Fed action, regulatory vacuum), the spiral of leverage, and the psychological after-effects.
  • “Every financial crisis is a function of one thing. Is leverage in the system. Too much leverage.” (Sorkin, 40:44)

8. Parallels and Cautions for Today

• The group debates drawing modern lessons—Sorkin advises caution but notes rising levels of retail risk-taking, product innovation, and diminishing guardrails as reasons for concern.
  • "We’re living in a moment right now...where some of those guardrails are almost purposely being taken away." (Sorkin, 41:23)
• They also discuss CEOs' current unease with the political and regulatory climate, particularly under the Trump administration, and the recurring theme of overconfidence in the government or “right people” to avert disaster.

9. Information Transparency & Manipulation

• Sorkin points out the profound lack of disclosure in 1929:
  • “Pre the creation of the SEC...rules and regulations and just disclosures just didn’t exist.” (Sorkin, 12:22)
• He details how journalists were often paid off to promote stocks, highlighting the era’s extreme conflict of interest and absence of ethical guardrails.

10. Lasting Societal Psyche Shift

• Sorkin relates personal family anecdotes to illuminate the generational trauma:
  • "My grandfather...watched somebody jump out of a window. And...he never bought a share of stock in his entire life." (Sorkin, 37:17)
• The crash, Sorkin argues, “shattered a nation” by deeply impacting trust in the market and economic system—effects that lasted for decades.

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Notable Quotes & Memorable Moments

• “This is the Nvidia of the time. This is the Cathie Wood of the time.”
  — Joe Weisenthal, 18:11 (on drawing analogies between 1929 tech hype and 2020s)

• "People were literally going up to reporters...here’s money and please write an article saying such and such stock is bound to move higher tomorrow because some rumor."
  — Andrew Ross Sorkin, 32:01 (on historic market manipulation)

• “Every financial crisis...is leverage in the system. Too much leverage. …the human condition is to want more.”
  — Andrew Ross Sorkin, 40:44

• “We still have four years. Four more years. This is not financial advice.”
  — Joe Weisenthal, 24:45 (humorously referencing the 100th anniversary of the 1929 crash)

• "She was an astrologer...taken shockingly seriously at that time by all sorts of financiers...she would literally sit inside the Plaza Hotel, and people would come up...she wasn’t doing one on ones at that point because...the groups were so big."
  — Andrew Ross Sorkin, 25:38 (on Evangeline Adams, celebrity astrologer)

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Important Timestamps for Key Segments

• [02:00-03:06] — The normalization/pop culture of speculation
• [04:25-06:22] — Why Sorkin wrote the book and the research challenge
• [06:46-09:22] — Profiles of Charlie Mitchell, Raskob, and Carter Glass
• [09:53-11:38] — How leverage and consumer credit fueled the bull market
• [13:02-14:07] — Pop culture figures consumed by the market: Churchill, Groucho Marx
• [16:33-17:40] — Jesse Livermore: myth, success, and tragedy
• [20:07-21:56] — Policy dominoes that led from crash to depression
• [27:31-29:01] — Technology limits and information delays in 1929 trading
• [32:49-33:41] — Investment trusts as “Russian dolls of leverage”
• [37:01-38:18] — Personal/familial impacts and how the crash “shattered a nation”
• [40:44-41:42] — Sorkin’s central lesson: leverage, regulation, and human nature

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Tone & Style

The conversation is witty, curious, and at times irreverent—“We want cameos!”—but deeply serious about history’s echoes, the enduring risks of financial innovation, and the sometimes tragic results of manias, leverage, and regulatory lapses. Sorkin balances anecdote-rich storytelling with wonky insight, and the hosts regularly inject pop culture references and parallels to 2020s market conditions.

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Final Thoughts

This episode is essential listening for anyone interested in financial history, market psychology, or the roots and ramifications of bubbles and crashes. Sorkin’s book—and this conversation—serves as both vibrant storytelling and a cautionary reminder of the persistent dangers when leverage, optimism, and regulatory blind spots converge.

Transcript

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[Andrew Ross Sorkin]

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[Joe Weisenthal]

Bloomberg Audio Studios Podcasts Radio News hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

[Tracy Alloway]

And I'm Tracy Alloway.

[Joe Weisenthal]

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.

[Tracy Alloway]

It's a culture of lines, lines going up. People watch the lines.

[Joe Weisenthal]

I really think that if you're walking down the street or on the subway and you see like a guy staring down at his phone, there's a good chance that he's like looking at a bitcoin.

[Tracy Alloway]

A bitcoin chart. Yeah.

[Joe Weisenthal]

At any given moment.

[Tracy Alloway]

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?

[Joe Weisenthal]

When's it going to end?

[Tracy Alloway]

When it's the crash.

[Joe Weisenthal]

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 gonna 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. I'm really relaxed.

[Tracy Alloway]

And the people who nailed the timing are pretty pleased with themselves, I assume.

[Joe Weisenthal]

And there's like five of those people, you know, like, that's the problem. Afterwards, somebody's like, oh, I sold the top. I feel good.

[Tracy Alloway]

Yeah, absolutely. Okay, so famous crashes. Famous crashes. We're gonna talk about one of them.

[Joe Weisenthal]

You know, I remember the dot com era very well. I don't remember the market environment.

[Tracy Alloway]

We're gonna talk about the 1920s. You have no memory of that. Shame on you.

[Joe Weisenthal]

I don't remember 1929 very well. I did read John Kenneth Galbraith's famous book the Great Crash. But there is a new book out on the great stock market boom and then crash of 1929. We are gonna be speaking with the author, someone I'm thrilled to talk to, someone whose accomplishments and work ethic puts us all. We're going to be speaking with the one and only Andrew Ross Sorkin, founder of DealBook at New York Times, co creator of Billions, co host of Some Squawk Box, cnbc. I made that joke when he had Jim Cramer on as if I'd never heard the network. And now the author of 1929 Inside the Greatest Crash in History and How It Shattered a Nation. Andrew, thank you so much for coming on Odd Lots. Thrilled to have you here.

[Andrew Ross Sorkin]

Thank you for having me. I feel like I'm a longtime listener. First time caller.

[Joe Weisenthal]

Amazing.

[Tracy Alloway]

Thank you so much.

[Joe Weisenthal]

This isn't the first time 1929 has been written about. And the Galbraith book is probably like, that was up until now, probably the most famous.

[Andrew Ross Sorkin]

A great book. Yeah.

[Joe Weisenthal]

What was the impulse to go back and write a book about this, this period of time?

[Andrew Ross Sorkin]

To be honest with you, it was about 10 years ago. I'd written Too Big to Fail. People used to ask me because I'd written about the financial crisis of 2008. They'd ask me questions about 1929. And the truth was I didn't really have answers because I sort of knew, I think, like most of the public today, that something pretty bad happened that I had. I had read the Galbraith book, but sort of beyond that. I was lacking details. And I honestly, I went on a vacation. It was like a nerdy vacation thing to do. I downloaded some books to Kindle and I brought some more with me. All about 1929. I sort of pored through them and I thought to myself, why can't I understand who the characters are? Like the people at a visceral level, like, what were they saying to each other, what were their motivations, what were their incentives, who was sleeping with who, what was really happening here? And I grew up sort of loving books that were written by Michael Lewis or Jim Stewart. With Den of Thieves, you mentioned A.

[Tracy Alloway]

Night to Remember or.

[Andrew Ross Sorkin]

Well, A Night to Remember with the Titanic was a great example of a book that really sort of made things feel human, right? And so I thought, you know, what, could somebody, and maybe it was me, do that to 1929? And the truth was I wasn't sure I could. One of the reasons I think this took so long is, was the entire time I wasn't sure. And when I 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 to interview. So you're, you're, 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 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.

[Tracy Alloway]

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, 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, you have a sort of more nuanced opinion.

[Andrew Ross Sorkin]

So I think there's a couple characters. 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, because if.

[Joe Weisenthal]

This is the top this year, you nailed the timing. But anyway, keep going.

[Andrew Ross Sorkin]

But as I was working on this, these characters, to me, like Charlie Mitchell, who ran a bank, called National City, which becomes Citigroup. 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 back then he would have been as famous as a Jamie Dimon 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. 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. 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 1920s. He was everywhere, all the time. Philosopher king, helped run 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 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, but 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. It would be an economic boon because.

[Tracy Alloway]

People would have go and spend your money.

[Andrew Ross Sorkin]

They'll go spend money, they'll buy cars, they'll have to go place, 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 me, of Glass Steagall fame. Of Glass Steagall 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 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 going to undo it.

[Joe Weisenthal]

The Galbraith book talks a lot about the. I guess what were they? It was before mutual funds. What were they called? The trusts.

[Andrew Ross Sorkin]

Investment trust.

[Joe Weisenthal]

The investment trust. But your book talks a lot about this idea of like retail leverage, basically which is what you described and you talk about. They would say, okay, we've taught 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 was nascent. And just like, yeah, let's port it over.

[Andrew Ross Sorkin]

I didn't appreciate that back then. I mean, brokerages were springing up on the corners of streets. The way they're like Starbucks in New York City.

[Joe Weisenthal]

I thought that was really fun. I always think about these physical. Or like the brokerage on a cruise. It's like, wouldn't it be fun to just walk in and play the market?

[Tracy Alloway]

You mentioned lounges in like hotels, women only stock trading lounges, which, you know, I would go for those nowadays they don't have to be women only, but just a place that you want to.

[Andrew Ross Sorkin]

The other thing that was nuts though is you would show up and you could give them a dollar and they would literally lend you 10. 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 was ever really happening. And so people didn't fully appreciate all the things that were possible.

[Tracy Alloway]

Let's just say 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 1920s, people were saying stocks were going to go up because the entire world was buying into the.

[Andrew Ross Sorkin]

U.S. i think that's very true. 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 buying into this future that we were all going to experience. And they wouldn't have been wrong, by the way. The conundrum is, I think the stock split, adjusted at the peak was like got to 530 some odd dollars and by 1932 was like $3. So.

[Joe Weisenthal]

So one thing I was, you know, obviously when radio comes rca, you're like, oh, it's the Nvidia of the time. Nvidia 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 Nvidia. But setting that aside, vendor financing, was RCA making a ton of money or was it mostly excitement about the future? Do we have radio's financials from the twenties?

[Andrew Ross Sorkin]

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. There literally would be leaflets that they.

[Joe Weisenthal]

Would hand, you know, their PE ratios going, the PE ratio.

[Andrew Ross Sorkin]

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.

[Tracy Alloway]

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?

[Andrew Ross Sorkin]

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. But I don't know the specifics exactly of how you would deal with your dividend. Yeah, when and if you got it.

[Joe Weisenthal]

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 US stock market. So Winston Churchill on an early trip to the United States gets really into margin trading. I think like you talk about Groucho Martin or something getting really into.

[Andrew Ross Sorkin]

To me that was also like a great surprise.

[Joe Weisenthal]

And that was also not something I had read about.

[Andrew Ross Sorkin]

I had no idea that, that Winston Churchill shows up in New York, actually shows up in the US even before this. But in New York In October of 1929, 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 money. He ends up losing money. Of course, like everybody else, he ends up going to a dinner with all the leading bankers 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 would was according to his son, he was really living at a brokerage house trying to retape every day and he ends up having to mortgage his home to pay for the margin calls when they called. Your best bottling plant employs 3,300 people. How do you get 3,300 people working at peak efficiency? Your best store has reduced waste water and energy usage. How do you make every store like your best store? Your best property has every guest raving. How do you make every property like your best property? The answer is Ecolab. Better performance, better outcomes, better impact. Ecolab. Now every location is your best location.

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[Andrew Ross Sorkin]

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[Tracy Alloway]

Going back to our intro, very few people managed to make money, but some of them did in spectacular amounts. Can you talk a little bit about Jesse Livermore?

[Andrew Ross Sorkin]

Ah, the great Jesse Livermore. There's been a lot written about Jesse Livermore. Jesse Livermore is a character in this book. Of course, I don't know if we should give away the ending for those who don't know, but Jesse Livermore ultimately shoots himself in the head in 1941 over at the Sherry Netherlands. There's a lot of blocks from there.

[Tracy Alloway]

Shooting themselves in the head.

[Andrew Ross Sorkin]

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 27 and 28 and 29 because the market kept going up and he was almost out of business. And then he goes back in, in the fall of 29 and makes something like $100 million 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, makes. Makes a little bit more. Loses a little bit more. Makes a little more and then loses. Well, everything.

[Joe Weisenthal]

You said that when you started this book, you know, you started a decade ago. So it was 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 because when I read history of any sort of. 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. This is 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 Cathie Wood of the time. This is the Whatever.

[Andrew Ross Sorkin]

So yes and no. I think it wasn't until two years ago when I was getting closer to being finished and also so recognizing what was happening in the moment today, and the parallels 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 debates that they're having in literally the spring of 1929 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 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 1929 and say, hey, by the way, this is kind of like that. Or, this is kind of like that. Some readers may see These parallels or different things themselves, some may never see them and some may come up with completely different parallels. And I would love that, frankly.

[Tracy Alloway]

I have a parallel. Okay. Something that happened slightly after the crash is Smoot Hawley.

[Andrew Ross Sorkin]

Right.

[Tracy Alloway]

The tariffs. And today we are in the Trump administration with very broad, widespread tariffs.

[Andrew Ross Sorkin]

Yeah, that wasn't on my bingo card when I was writing that originally.

[Tracy Alloway]

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?

[Andrew Ross Sorkin]

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 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. 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's born in 1913, that they were cognizant of the political pressures. If they were seen, they couldn't have pulled off a Volcker like move. They knew there was 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 confluence 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 leads eventually to 9,000 banks going out of business and unemployment at 25%.

[Joe Weisenthal]

It's interesting, speaking of the Fed, because these days there's all this question of like, we're looking at financial conditions, we're looking 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 as one of their main tools that they had in their toolkit.

[Andrew Ross Sorkin]

So that was their big tool or what they thought was their tool. However, they didn't really use it and so you had this sort of fascinating debate happening in the spring of 1929, when they're sitting there saying, there's too much speculation, we need to end the speculation. How do we do that? Well, the decision they came to effectively was to send out letters to banks saying, please stop lending to speculators.

[Tracy Alloway]

Moral suasion, right?

[Andrew Ross Sorkin]

To which the bankers said, what are you talking about? How are you define what a speculator later 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, 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 that I don't think I understood the texture of what really led to all of this.

[Tracy Alloway]

There's another parallel speaking of the Fed, this might be pressing it, 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, right? 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 1920s, there was a sense that America had beaten the boom, bust cycle, right? Because there was another crash previously, which was 1907.

[Andrew Ross Sorkin]

Look again, I think this is one of those things where because of the 1907 experience, which by the way was solved effectively by J.P. 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 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 J.P. morgan during this period. J.P. 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 I think that 1929 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 it was too late.

[Joe Weisenthal]

So 1907, literally 100 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.

[Andrew Ross Sorkin]

And then we get you're making your own parallelism.

[Joe Weisenthal]

I know.

[Andrew Ross Sorkin]

It's.

[Joe Weisenthal]

How do you not. How do you.

[Tracy Alloway]

How can you not?

[Joe Weisenthal]

That's what the brain does. 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.

[Andrew Ross Sorkin]

By the way, we're in 25, so we still have four years.

[Joe Weisenthal]

Four more years. This is not financial advice. But four years. I'm going to try and make my money. Wait, Maybe this. I'm going to ask you something. I don't know if there's. You may not even want to answer. This could be like a really good movie or TV show on Netflix.

[Tracy Alloway]

Yes. I thought. It's very Gilded Age.

[Joe Weisenthal]

It's very Gilded Age. I had that thought, too. Can you give us a little news here?

[Andrew Ross Sorkin]

I don't have any news for you.

[Joe Weisenthal]

You know, co creator of Billion.

[Andrew Ross Sorkin]

Happily, there's a. A bunch of folks in Hollywood who've been reaching out recently, and. And there's some conversations going on, but no news. And I, you know, that's one of those cross your fingers kind of things.

[Joe Weisenthal]

We could officially say that we think it would be a good show.

[Tracy Alloway]

We want cameos.

[Joe Weisenthal]

Yeah, we want cameos.

[Andrew Ross Sorkin]

We. We can organize that. This is a period piece, so we're gonna have to.

[Tracy Alloway]

I love it. Yes.

[Joe Weisenthal]

Tracy could be the astrologer that hangs out. Was it. Was it the Algonquin Hotel and gives out stock tips based on Plaza Hotel? Okay, tell us about that.

[Andrew Ross Sorkin]

So you're talking about Evangeline Adams.

[Joe Weisenthal]

Yeah, tell us about.

[Andrew Ross Sorkin]

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 up and talk to her and visit with you at a newsletter. And then. And by the way, interestingly, in October of 1929, 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 because there was. The groups were so big.

[Tracy Alloway]

She was summoning the animal spirits.

[Andrew Ross Sorkin]

Yes. And she was. She was praying for, of course, for higher stock prices. Interestingly, she got a lot of credit for the stock market boom because in the fall of 29. I think right after Labor Day in September, a reporter called her and asked her what was in the stars, of course, and she told everybody that the market was going to go up.

[Tracy Alloway]

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. And some people thought that contributed to a lot of the problems in the 1929 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?

[Andrew Ross Sorkin]

So one of the big technological problems in 1929 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 prices of the stock is, but it would literally be hours off. And that's if you're physically on the 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. 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 1929, the reason there were so many people in the streets is 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, by the way, on some of these boats, you know, people were trading on boats. Those guys were, you know, half a.

[Tracy Alloway]

Day a day they're sending pigeon carriers. Pretty much a stock price.

[Joe Weisenthal]

Well, Jesse Livermore, like, he had his own phone lines, right? He was sort of like.

[Andrew Ross Sorkin]

He was the citadel.

[Joe Weisenthal]

I was literally going to say he was the Ken Griffin setting up a satellite in his dorm. Or any one of these people who later on try to get a faster line to the exchange with microwave towers. He did that with phone lines.

[Andrew Ross Sorkin]

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.

[Tracy Alloway]

Phone lines were the lindy latency of the time.

[Joe Weisenthal]

Yeah, they Were.

[Tracy Alloway]

That's what I say.

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[Tracy Alloway]

There are two kinds of people in the world.

[Andrew Ross Sorkin]

People who think about climate change and.

[Tracy Alloway]

People who are doing something about it.

[Andrew Ross Sorkin]

On the Zero podcast we talk to both kinds of people. People you've heard of, like Bill Gates. I'm looking at what the world has to do to get to zero.

[Joe Weisenthal]

Not using climate as a moral crusade.

[Tracy Alloway]

And the creative minds you haven't heard of yet.

[Andrew Ross Sorkin]

It is serious stuff, but never doom and gloom.

[Tracy Alloway]

I am Akshat Rati. Listen to Zero every Thursday from Bloomberg podcasts on Apple, Spotify or anywhere else you get your podcasts. Okay, another parallel I'm just gonna throw out.

[Andrew Ross Sorkin]

I love it.

[Tracy Alloway]

And you can agree or disagree.

[Joe Weisenthal]

Who was the Andrew Ross Sorkin of the time?

[Tracy Alloway]

Oh, there we go. Was there an Andrew Ross Sorkin of the time?

[Andrew Ross Sorkin]

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 okay, so that's. I would, I would take that.

[Joe Weisenthal]

All right.

[Andrew Ross Sorkin]

Interestingly, there was a reporter out lots of the time, Walter Lippman.

[Joe Weisenthal]

Oh, you know, downloaded a Walter Lippman.

[Andrew Ross Sorkin]

So Walter Lippmann was a very interesting journalist because he was, he was very insidey. He had a very close relationship with Thomas Lamont at JP Morgan. Some people might have said back then afterwards, too close.

[Joe Weisenthal]

Okay, that's not.

[Andrew Ross Sorkin]

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. But the other thing I should say, we as a group, meaning the journalistas, did not cover ourselves in glory 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 reporters, forget about taking them out to dinner. They were saying, here's money and please write an article saying such and such stock is bound to move higher tomorrow because some rumor.

[Tracy Alloway]

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 1929 crash, a lot of it was, you know, businesses issuing stock in order to borrow money in order to invest in more stocks. Any similarities there? That sort of self. I think it's dealing well.

[Andrew Ross Sorkin]

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. I don't know if I can look at fully at the AI companies like that just yet though. I think there are probably certain types of deals and vendor financing sort of arrangements that should be raising questions. But you could look at 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.

[Joe Weisenthal]

The question is the erstwhile Microstrategy just for people who haven't been paying attention to the name.

[Andrew Ross Sorkin]

Yeah, yeah. Formerly MicroStrategy. Michael Saylor. And so there are these businesses that have similarities. Again, I don't want to tell you that. Strategy. Sure. Is it 1929 style investment trust per se? I don't know.

[Joe Weisenthal]

I said in the intro you're like, have all these affiliations. You're still doing deal book, all of this other stuff. Like what is.

[Andrew Ross Sorkin]

We grew up together.

[Joe Weisenthal]

No, you're like, what is your. Because you're still doing all of that. I've like paired back a bunch of stuff. I don't do TV anymore, etc. Like what is your like date?

[Andrew Ross Sorkin]

But I used to wake up with.

[Joe Weisenthal]

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 a day like for you these days? What are you up to?

[Andrew Ross Sorkin]

So I wake up usually around 4:30 ish. I usually do sort of the final pass on some dealbook stuff till call it 5, 10ish.

[Joe Weisenthal]

You just go straight to the computer.

[Andrew Ross Sorkin]

You go straight. There's no, there's no yes, no. When the alarm goes off, up, up, up. And then I do squawk box. Oftentimes still fixing things in deal book up until the bitter end. And that usually goes till about 9. Often go on to Morning Joe, maybe talk a little economics there and then get back into dealbook land as we plan out the next day's newsletter. And then in between all 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 until the end of the day.

[Tracy Alloway]

What time do you go to bed?

[Andrew Ross Sorkin]

I try to go to bed. I try by 9:30. If I can be.

[Tracy Alloway]

That's reasonable.

[Andrew Ross Sorkin]

If I can be in bed by 9:30, this can work.

[Tracy Alloway]

Yeah.

[Andrew Ross Sorkin]

If, if it gets to 10 or 10:15 or anytime after that, that's going.

[Joe Weisenthal]

To be a rough day. The next day.

[Andrew Ross Sorkin]

The next day is not a good day.

[Tracy Alloway]

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 influe policy from the Trump administration.

[Andrew Ross Sorkin]

Oh, goodness. 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 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 earnings reports. Most CEOs I know say, I don't want to have to do earnings four times a year. I'll do that twice. You have a whole movement afoot. And by the way, this to me is a parallel 1920s. We talked about democratizing finance. That was like a big concept. Now this whole idea of democratizing finance in the context of putting private credit and private equity and venture capital inside your retirement accounts in these sort of semi liquid funds and things, that's very 1929ish to me. So I do think there are people who like that, but I think there's still this sort of underlying agita can.

[Joe Weisenthal]

You talk actually a little bit more about this shattered a nation part of it? Like, what does it mean? 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?

[Andrew Ross Sorkin]

Well, so I think it ultimately did come close to ripping apart 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 11 years old. He's no longer alive in 1929. His brother was a messenger boy, and he was down there in October of 1929. He used to tell this story, and he was helping his brother, and he watched somebody jump out of a window. And he lived TILL he was 91 years old. And he never bought a share of stock in his entire life. Bought some bonds, never stock. And he would always say, andrew, this whole stock market thing, not for us, too risky. And so when I say shattering a nation, I mean, I think it did, to some degree, come close to shattering the psyche of a nation. Did it come close to a civil war? No, but clearly the idea of unemployment being 25% in America, that there were shanty towns, otherwise known as Hoovervilles, literally in Central park, you know, just a couple 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.

[Tracy Alloway]

Yeah, you don't really go beyond the 1930s in the book, but it does feel like it took a very long time to rebuild, I guess, trust in the stock market. We didn't really see retail, like, dive in a lot until, I guess, the 1960s, something like that.

[Andrew Ross Sorkin]

Yeah, I think that's right. I think that goes a little bit to the sort of generational divide. Look, the other piece of this is the book doesn't go into, you know, World War II and all the things that happened after that. But that's actually, I think, coming out of World War II is what ultimately led to sort of the. The boom again, to the extent we had one in the US and obviously the market boom and the reason why people, I think, started to get back in the market was because the market kept going up, and people started to look at the market like they 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.

[Joe Weisenthal]

Totally. 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 can talk again. We can. We can say all the things that we've been hiding. It's kind of messed up, isn't it?

[Andrew Ross Sorkin]

Look, you think that there should be real free speech taking place and that people could raise their hand, the liberal attitude towards speech. 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 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 to law firms, to universities, the whole Paramount CBS story, taking stakes in intel and other things, I mean, I think there's 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. Yeah.

[Tracy Alloway]

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 1929 crash and really emphasize it to politicians, policymakers, regulators, business people, whoever, what would it be?

[Andrew Ross Sorkin]

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, you need to have guardrails to prevent that. Because the human condition is to want more. Right. That's what the investor class it's. I hate to say it. 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 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.

[Joe Weisenthal]

Well, we have four years between until the hundred year anniversary of the 1929 crash. Andrew Osorkin, so thrilled to finally have you on the podcast. The book is a great opportunity. It's really great.

[Andrew Ross Sorkin]

I really appreciate it.

[Joe Weisenthal]

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.

[Andrew Ross Sorkin]

Thank you. I hope. I hope I can come back here in 2029, if not for sure, and then 2030. Yeah.

[Joe Weisenthal]

All right. That was really.

[Andrew Ross Sorkin]

Thanks.

[Tracy Alloway]

Thank you so much.

[Joe Weisenthal]

Tracy. That was a lot of fun. I love bubble history. We used to do tons more episodes on bubbles. They're always really fun.

[Tracy Alloway]

Well, you know, the Florida land bubble gets mentioned.

[Joe Weisenthal]

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 Groucho Marx.

[Tracy Alloway]

It's just astrologer.

[Joe Weisenthal]

It's an incredibly rich story. It's incredibly rich piece of history. Yeah.

[Tracy Alloway]

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?

[Joe Weisenthal]

Wait, is there any time. Was that a bubble? I didn't know about that one, apparently.

[Tracy Alloway]

And sheep. I want to do New England sheep, too. I want to do all the animal bubbles.

[Joe Weisenthal]

Let's do them all. There's the bat, the guano bubble. We've never done an episode on that. But the one other thing too is, I think, like, you know, 2007, 2008, 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 90 cents or whatever. And then people panicked and there was a bankruptcy.

[Tracy Alloway]

There was still a lot of credit tied to it.

[Joe Weisenthal]

There was a lot of. There was definitely the leverage.

[Tracy Alloway]

The debt was being used as collateral for.

[Joe Weisenthal]

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. It's a. It's a things. Everyone wants access to the right tail of whatever, and everyone wants the big score, et cetera. And that's what sort of 1929 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 Winston Churchill and Groucho Marx.

[Tracy Alloway]

Well, you know the chart that 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 highs.

[Joe Weisenthal]

So anyway, people should definitely check out this book.

[Tracy Alloway]

All right, shall we leave it there?

[Joe Weisenthal]

Let's leave it there.

[Tracy Alloway]

This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Allaway.

[Joe Weisenthal]

And I'm Jill Weisenthal. You can follow me at the Stalwart. Follow our producers Carmen Rodriguez at carmenarmon, Dashiell Bennett at dashbot, and Kale Brooks at Kale Brooks. For more Odd Lots content, go to bloomberg.com oddlots we have a daily newsletter and all of our episodes and you can chat about all of these topics 247 in our Discord Discord GG oddlots.

[Tracy Alloway]

And if you enjoy Odd Lots, if you like it when we talk about the crash of the 1920s, 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.

[Andrew Ross Sorkin]

Sam.