Will The Market Crash in 2026? with Andrew Ross Sorkin

Summary

Podcast Summary: Smart Girl Dumb Questions

Episode: Will The Market Crash in 2026?

Host: Nayeema Raza
Guest: Andrew Ross Sorkin (journalist, author, co-creator of DealBook and CNBC Squawk Box)
Date: January 6, 2026

---

Episode Overview

This episode dives into the possibility of a market crash in 2026, drawing rich parallels between today and past financial crises, especially 1929. Host Nayeema Raza candidly interrogates Andrew Ross Sorkin—fresh off his new book "1929"—about the patterns underlying market bubbles, the failures and successes of economic safety nets, the psychology of financial power, and whether lessons from history can help us anticipate the next big crash. The conversation is wide-ranging, touching on media trust, American inequality, the logic of bailing out "too big to fail" institutions, AI, crypto, and the persistent anxieties of both billionaires and journalists.

---

Notable Timestamps and Segment Highlights

01:06 – On Creative Work and Imposter Syndrome

• Andrew Ross Sorkin: “Writing, it’s not. It’s not my way. I’m sort of in pain most of the time."
• Sorkin dispels myths about effortless genius, describing the discipline, preparation, and pain behind his output (contrasting, e.g., himself with Michael Lewis).

03:11 – Introducing the Book "1929" & Its Modern Parallels

• Sorkin explains the cultural and technological boom of the 1920s, likening it to today's tech revolution.
• [04:47] “This was the first time that ordinary Americans could trade stocks for real... Wall Street decided we’re going to lend people money so they can buy into this dream.”

05:46 – Are We in 1929 All Over Again?

• Nayeema: “You never want to say if we’re—"
• Sorkin: “I don’t think we’re in 1929. I don’t think it’s preordained that we have to have a crash... It’s more like we’re in the 90s. Maybe we’re like 1996 or 97... The question is, does it have to be cataclysmic?”
• Draws parallels to the Dot-Com Bubble era (late 1990s).

07:45 – Social Contexts: Roaring Twenties vs. Today

• The 'roaring' boom was localized (NYC, big cities)—not truly national, like current divides.
• [09:10] Sorkin: “If you just look on the ratios of inequality, 1920s are very, are very much like now.”

12:18 – Shifting American Values (1998-2023)

• Cites a Wall Street Journal poll: Patriotism, religion, “having kids,” and community involvement have steadily declined in perceived importance, while “money” rises.
• [13:07] “Clearly the money side, yes [is the same as 1920s]. ... Part of it, FOMO. They didn’t call it FOMO in the 1920s, but that’s what it was.”

16:41 – Money, Social Media, and FOMO

• Sorkin reflects on how visibility of wealth via technology alters the culture of envy, aspiration, and resentment.

---

The Future: AI, Robotics, Universal Income

[16:41] Clip: Elon Musk asserts that AI and humanoid robots “will actually eliminate poverty,” make work optional, and eventually render money “irrelevant.”

• Sorkin (17:54): “Here’s my concern... I imagine the spoils of all of this going to the shareholders and owners... unless you genuinely believe it’s all going to get redistributed... I think most of [these AI leaders] are capitalists.”
• Skepticism about UBI’s practical likelihood; worries about concentrated benefits.
• Musk and Altman’s visions contrasted with historical shifts in access to credit and leverage (pivot back to Rasco and consumer lending in the 1920s).

21:19 – The Birth of the Five-Day Workweek

• Sorkin details how John Rascob catalyzed the two-day weekend—not out of benevolence, but to fuel consumerism.

22:48 – The Rise of the Business Celebrity

• Parallels drawn between 1920s financiers (Rascob, J.P. Morgan) as covers stars and today’s “business famous” tech titans.

---

Financial Bubbles & Lessons from Crises

24:45 – Anatomy of the 1929 Crash

• Crash was not a single event, but a drawn-out “relentless unraveling.” Leveraged margin buying and policy missteps (tariffs, gold standard) were critical causes.

37:56 – Lightning Round: Recent Crises

Dot-Com Crash (2000-2001)

• Cause: Severe overvaluation, some leverage ("the dream got ahead of the fundamentals").
• What we failed to learn: Continued chase for "story stocks" and neglect of proper incentives.
• [39:09] “Amazon—people didn’t believe in it, didn’t make money... How do you know?”

Global Financial Crisis (2008)

• Cause: Massive housing leverage, incentives, massive moral hazard on both lender and borrower sides.
• Lesson: Improved capital requirements and risk oversight—Dodd-Frank et al.
• Failure: Lack of accountability for individuals; deepened public distrust in 'experts.'
• [42:53] Sorkin: "I believe what happened in 2008 in some ways led to a complete shift in America...a direct line between 2008 and the election of Trump in 2016.”

COVID Recession (2020)

• Different: Universal bailouts meant less finger-pointing ("everyone got a car").
• [44:07] Sorkin: “In the pandemic, we just started sending checks to everybody, so nobody really had a place to complain.”

---

Major Risks and The "Wildcard"

49:03 – Today’s Financial Risks

• Excitement (and risk) in newer financial products: SPACs, private credit funds for retail investors, "semi-liquid" vehicles with redemptions gates ("marks to make believe").
• Sorkin's wildcard: The US’s unprecedented sovereign debt. If rates spike and global lenders lose confidence, the “solution” of just printing money during crises could backfire hard.
  • [52:19] "At some point...the investor class that buys Treasuries...says, 'Excuse me, I see what you're doing...you're going to have to pay us a lot more for the risk.'"

55:00 – Are We in an AI Bubble?

• Sorkin: “We’re probably in an AI bubble, and the AI bubble probably will pop, but that doesn’t mean that AI will not be with us 20 years from now.”
• Risks in the infrastructure underneath (datacenters, energy commitment).
• [55:43] On crypto: "It’s a belief system...but it’s still a small piece of the puzzle."

Too Big To Fail, Redux

• Banks, cloud computing firms, even some cities and states—the list of “too big to fail” entities has grown.
• [57:26] Sorkin: “Cloud computing, oddly enough, has become too big to fail. If they were to fail, we would have—it’s like electricity.”

---

Culture & Power: The Psychology Behind the Markets

Who Holds the Power—Really?

• [61:28] Sorkin on J.P. Morgan: “He doesn’t think he has power. That’s pretty much how I think most people feel, even the people who have the most power in the world.”
• Billionaires often don't view themselves as powerful—they’re still striving, still insecure despite apparent achievements.

Generational Shifts

• New money (Altman, Zuckerberg) is "still trying to prove themselves". Philanthropy often comes with age; Sorkin wonders if responsibility increases with time.

Media Trust and Access

• [66:16] Sorkin: "I think my job is to be the ultimate fair-weather fan...If you do something good, I’m happy to say attaboy. If you do something bad, my job is to hit you over the head."
• On media trust: More trust in 1929, despite being “bought and paid for,” because people lacked informational alternatives.

---

Lightning Rounds & Listener Questions

(Sample questions and responses for flavor):

• First sign of an AI bubble bursting?
  [70:11] Sorkin: "Some AI company ... announces they’re having to pull back on spending ... or their plans to build more data centers slows down."
• Who is DealBook’s most surprising reader?
  [75:48] “LeBron James reads DealBook.”
• Bobby Axelrod of "Billions" based on whom?
  “[Multiple inspirations, but honestly a singular character.]”
• Sorkin’s dumb area?
  “[77:06] I’m uniquely dumb about music. People talk about music around me and I’m like a dunce.”

---

Best Quotes & Memorable Moments

• On creative pain:
  "[Writing] is not my way. I’m sort of in pain most of the time." – Andrew Ross Sorkin [00:57]

• On technology and FOMO:
  “You pick up TikTok and you see all of these things and it’s constantly in your face. And so I think it creates both a FOMO and a resentment.” – Sorkin [16:13]

• On American inequality:
  "If you just look on the ratios of inequality, 1920s are very much like now." [09:10]

• On AI liberation:
  “Here's my concern... I imagine the spoils of all of this going to the shareholders and owners... unless you genuinely believe it’s all going to get redistributed.” – Sorkin [17:54]

• On future financial risk:
  “We are always fighting the prior war and we’re missing the next one.” – Sorkin [47:38]

• On billionaire psychology:
  "I don’t think the money is emotional armor. In fact, I almost think it’s like anti-armor..." – Sorkin [63:20]

---

Final Takeaways

• There WILL be another financial disruption, but its cause and magnitude are impossible to time or pinpoint—bubbles are frequently visible only in hindsight, and each new crisis is shaped by innovations (and regulations) spawned by the last.
• Society’s growing wealth gap, celebration of financiers, media skepticism, and the sheer speed of technological innovation echo the Roaring Twenties, but with critical differences: inequality is now globally visible, and America's unique power is less assured.
• The wildcard now is not just leverage or policy missteps, but the massive build-up of sovereign debt and global trust in the U.S. dollar.
• Even market movers and billionaires do not feel secure or powerful—ambition and insecurity drive their relentless pursuit and fuel societal anxiety.
• The media and finance are more transparent than ever, but not necessarily more trusted; historical cycles show both progress in policy and persistent risk-taking in new forms.
• Will there be a market crash in 2026? The guest declines a clear prediction, but warns that we’re always “fighting the last war” and must remain vigilant, especially as new financial products, AI, and mounting sovereign debt reshape the landscape.

---

For Listeners Short on Time

Key Sections:

• History repeating? (03:15-06:00)
• Parallels with the 1920s: inequality, financial innovation, values shift (08:49-12:18)
• The wild card: sovereign debt & global trust (52:19-55:00)
• Are tech titans the new "too big to fail"? (56:39-58:01)
• On the psychology of power & billionaires (61:28-63:20)
• Media trust, then & now (64:45-67:54)

---

Podcast’s Tone & Style:
Frank, humorous, and highly accessible—even when covering dense financial material. The conversation is peppered with moments of levity (fancy dentists, Burning Man, and balloon pants!), but consistently returns to core economic and societal concerns with both skepticism and curiosity. Both host and guest are deeply aware of their “insider/outsider” roles probing the logic and ethics of money and power.

---

Transcript

[Andrew Ross Sorkin]

This is selfish to say anything that I do that's half decent takes a lot of time. Whether it's preparing for an interview, preparing for their show in the next morning, working on the newsletter. It. It just. It doesn't. Just like. It's not a natural act for me. I have to study, I have to prepare. So it's not the whole idea that you could just like, bang, bang, bang from one thing to the other and that they'd all just. Just like, you could just sit down at any moment. It would just be awesome. It's just so not true.

[Nae Mahraza]

For me, I feel like that's very refreshing to hear because I feel like your brand is this prodigy who landed at the New York Times at, like, age. What was it, 17?

[Andrew Ross Sorkin]

18. 18, yeah.

[Nae Mahraza]

But it hasn't been easy. Come.

[Andrew Ross Sorkin]

No, no, no, no, no, no. Not easy. No. Nothing is easy. Writing is not easy. And, you know, there's certain writers, I see them even at the office today, who. And I have visions of Michael Lewis like this, you know, playing the keyboard like a piano.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

I do not play the keyboard like a piano. People who just sort of like, sit there cackling to themselves in such enjoyment. Writing, it's not. It's not my way. I'm sort of in pain most of the time.

[Nae Mahraza]

Is it actually painful for you when you're writing?

[Andrew Ross Sorkin]

Totally, yeah.

[Nae Mahraza]

Is it more or less painful than your very bougie dentist office that has a massage chair? Before we started taping, Andrew Rossorkin disclaimed that he lives a fancy life.

[Andrew Ross Sorkin]

I have the greatest dentist. He. When you go there, I'm going to get in trouble for saying this. I mean, people are just going to be lambasted. Yes, you lie on a massage table and they clean your teeth while you're lying there, but I'm going to make it crazier. You ready?

[Nae Mahraza]

What do they do?

[Andrew Ross Sorkin]

Shampoo your hair if you want. For an extra fee.

[Nae Mahraza]

Is there a happy ending? I'm just kidding.

[Andrew Ross Sorkin]

No, but close.

[Nae Mahraza]

What is it?

[Andrew Ross Sorkin]

They will massage your feet. No, no joke.

[Nae Mahraza]

You let a dentist who touches people's feet touch your teeth.

[Andrew Ross Sorkin]

Different person. One person. One person cleans your teeth. The other person massages your feet. And because you're focused on your feet, you don't focus on them doing all the crazy things in your mouth. That's unbelievable, Andrew.

[Nae Mahraza]

I don't know. I feel like. I feel like this is something that.

[Andrew Ross Sorkin]

I've just lost credibility.

[Nae Mahraza]

You were so disarmed by the podcast name.

[Andrew Ross Sorkin]

See, it works.

[Nae Mahraza]

Secret.

[Andrew Ross Sorkin]

I just gave it to you right there. That's it right there.

[Nae Mahraza]

Andrew Ross Sorkin of Dealbook fame. Smart Girl, dumb questions. Is 2026 gonna be a year of a market crash? I'm Nae Mahraza. This is Smart Girl, Dumb Questions. And today my guest is the prolific journalist Andrew Ross Sorkin of New York Times Dealbook and CNBC Squawk Box fame. Andrew, thank you so much for being here.

[Andrew Ross Sorkin]

Thank you for having me.

[Nae Mahraza]

It's so prolific that you've given us TV shows like billions or the book to Too Big to Fail, which was made into a film. And this book now, New York Times bestseller, 1929.

[Andrew Ross Sorkin]

Thanks.

[Nae Mahraza]

It's great. It's actually a great book. I hate having.

[Andrew Ross Sorkin]

That's actually a great book. That's a great book. I'll take it.

[Nae Mahraza]

I hate having people on book tour, but I really enjoy this book.

[Andrew Ross Sorkin]

Thank you.

[Nae Mahraza]

Did you know it was gonna be a hit as you were toiling away for eight years?

[Andrew Ross Sorkin]

I didn't know if it would be a hit. I thought there was, like, a relevancy to it. I didn't know when I began all the things that were gonna happen in our real world, by the way, that are so bizarrely parallel to now or back. Back to then. But I thought this. The more I got into it, the more I thought, yeah, this is like a yarn. And there's a great. These are some great characters, and you can really feel them. And so I was hoping. But you have no idea.

[Nae Mahraza]

So for people who are like, what the hell happened in 1929? Yeah, give us the headline, the deck, maybe the lead of 1929.

[Andrew Ross Sorkin]

Okay, backstory is 1920s, probably the craziest decade of the last, frankly, several hundred years. I would actually say the modern America that you live in today is largely a function of the 1920s. Automobiles come of age, by the way. Charles Lindbergh. Planes are coming of age. Radio is coming of age. So there's sort of this excitement about technology. All the buildings you see in New York City were built in the 1920s. Chrysler Building, Empire State Building, the Waldorf Astoria actually moved to Park Avenue. 230 Park Avenue. If you ever drive through that building, you know when you're driving towards Grand Central, like, literally physically through a building.

[Nae Mahraza]

Right. Oh, that. Like little. That little.

[Andrew Ross Sorkin]

Yep. 19, 19, 29 as well. So it all happened then. And layer on top of that the idea. This was the first time that ordinary Americans could trade stocks for real, the.

[Nae Mahraza]

Democratization of the market, and they could.

[Andrew Ross Sorkin]

Bet on all of this, in large part Because Wall street decided we're going to lend people money so they can buy into this dream. And that is really the story of sort of the roaring twenties and what happens. The stock market between 1928 and September 1929 goes up 90%. And if, you know.

[Nae Mahraza]

And there were days like year on year where it was up 100%.

[Andrew Ross Sorkin]

Oh, yeah, it was wild. I mean, it was completely sort of this wild period of time and it was extraordinary. And then of course, people were so overextended, the valuations were so high. There was all sorts of political debates about whether things had gotten completely out of control. And invariably as things do, what goes up must come down.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

October 1929. It does.

[Nae Mahraza]

It does. And then it propels us into the Great Depression.

[Andrew Ross Sorkin]

It does. But that's the other big thing for me that was a surprise in a way. I think a lot of people think like there was some terrible day in October of 1929 and then somehow the Great Depression happened. Yeah, it wasn't really like that. It was that October happened and it sucked all the confidence out of the system. And then that was really just the first domino of a series of dominoes, mostly policy choices in Washington by President Hoover and the Federal Reserve and others, including tariffs, by the way, in 1930 that then walk us into 25% unemployment, 9,000 banks going out of business in 1932, 1933.

[Nae Mahraza]

So. And then in a multi year process to get out of it with the New Deal and a world war. But okay, so I have listened to you on other interviews because you are on book tour, which means that you are in the market right now.

[Andrew Ross Sorkin]

This is true.

[Nae Mahraza]

You're a bit cute about it, Andrew, because you don't ever want to say whether we are in fact in 1929.

[Andrew Ross Sorkin]

Right.

[Nae Mahraza]

You never want to say if we're.

[Andrew Ross Sorkin]

Well, I'll actually go, I'll do it for you. No, because I'll. I don't actually think.

[Nae Mahraza]

Because we're massaging your feet.

[Andrew Ross Sorkin]

Because you're massaging my feet.

[Nae Mahraza]

Yes.

[Andrew Ross Sorkin]

I don't think we're in 1929. I don't think it's preordained that we have to have a crash that sort of leads to something that's as cataclysmic as the Great Depression. But I probably think we're at least it's more like we're in the 90s. Maybe we're like 1996 or 97. And in 98 or 99 or 90, you know, 2000, there's a crash the question is, does it have to be cataclysmic, like 29 or 2008? And I don't think we know the answer yet.

[Nae Mahraza]

Okay.

[Andrew Ross Sorkin]

And I'm actually hoping that it won't be that bad. I have one wild card in my head that could change all of this and make it worse than all of those things. Okay.

[Nae Mahraza]

Let's keep that as a cliffhanger for.

[Andrew Ross Sorkin]

People to keep that. Okay. But I don't know.

[Nae Mahraza]

Okay. Okay, we're gonna get to your wild card. I have to remember to ask you that. There's so much I wanna talk to you about, about what analogies we can bring from 1929 into the late 2000s. I wanna talk about the state of journalism, which was under kind of rethinking in the years of this book. And also certainly as now, by the.

[Andrew Ross Sorkin]

Way, all the journalists were on the payroll back then, too.

[Nae Mahraza]

I know. That was so wild.

[Andrew Ross Sorkin]

Right.

[Nae Mahraza]

And at some point, I have to ask you what was going through your mind when Alex Karp was gyrating on stage next to you at the Dealbook Summit recently? But let me start.

[Andrew Ross Sorkin]

We can talk about that too. We did an AI thing where they had him, like, doing push ups on the.

[Nae Mahraza]

Yeah. Did you? I was gonna ask you if you saw that. And I actually thought that was real when I first saw it. I'm like, wow, he is so fit. I really have to go.

[Andrew Ross Sorkin]

No more. I wouldn't have been surprised if he had done that. But that was not real.

[Nae Mahraza]

He was doing handstand.

[Andrew Ross Sorkin]

Pushing handstands on the chair. Sora is amazing. Sora is amazing.

[Nae Mahraza]

Would you have challenged him to a duel?

[Andrew Ross Sorkin]

No, I just would have started counting.

[Nae Mahraza]

Yeah, that's the right thing to do there. So as you mentioned, the 1920s, where this book kicks off, it is like the Roaring Twenties. There are towers to the sky, there's lots of champagne flowing, even though it's the Prohibition, which is like a wild aspect of this time. And it feels like a Roaring Twenties moment right now in America, in a weird way, in a certain part of the country.

[Andrew Ross Sorkin]

In a certain part of America, I was gonna say. I think it's like, by the way, but that was actually very much like the 1920s too. It was only a certain part of America. It was New York and some of the big cities that were feeling this sort of hop in their step next.

[Nae Mahraza]

To people who were really struggling.

[Andrew Ross Sorkin]

Totally.

[Nae Mahraza]

And this feels like right now, or maybe this has always been the thing, I don't know. But it now feels like no I.

[Andrew Ross Sorkin]

Think the inequality issue was, you know, if you just look on the ratios of inequality, 1920s are very, are very much like now. There was a period, yes, because inequality, look, there was a period of time call in the 50s, 60s and 70s where the inequality happily was compressed.

[Nae Mahraza]

Right.

[Andrew Ross Sorkin]

And some people look back and say that was, you know, the ultimate American dream.

[Nae Mahraza]

But then unemployment at that time was like 2.53%. Right.

[Andrew Ross Sorkin]

So the lowest unemployment we ever had was, I believe, 19% 1954 and was two and a half percent. It was really the advent of, you know, unions. But look, part of it was the United States was a monopoly power. Everybody else was out of business around the world, and so you could charge monopoly rents. And then when you go back and look and really wasn't to the 19, you know, wages start to stagnate in the 1980s, which I think if you go back and look, is tied almost directly to the fact that the rest of the world all of a sudden started to compete with the United States again.

[Nae Mahraza]

Right.

[Andrew Ross Sorkin]

And so I sometimes wonder whether the sort of 1950s, 1960s American dream, which was sort of a Leave it to Beaver, you know, a dream which was, you know, if, you know, wait, what is.

[Nae Mahraza]

I don't know what Leave it to Beaver has any. Sorry, I didn't grow up in the US I have no idea about it.

[Andrew Ross Sorkin]

Sort of, you know, the Leave it to beaver version of the American dream was sort of a paint by number situation. If you, if you go to school and you, and you do okay, yeah, you're going to get a job and, and you're gonna get a house with a picket fence and you're gonna get a wife or a husband and two kids and a dog, and it was all gonna be just fine, by the way. Some people would say that was a very white dream, by the way, back in the day. But all I'm saying is it's possible that that period of time is actually an historical aberration, not the norm.

[Nae Mahraza]

I feel that about so many things that we are kind of packaged and sold as norms. The American dream, but also the, the idea of the modern nuclear family, like these are aberrant moments in the kind of post World War II, pre globalization era that existed for a fraction of time. But these days, in our roaring twenties, it seems like instead of towers to the sky, we have rockets to Mars. Instead of flapper dresses, we have balloon trousers. I'm sure you're very aware of the fashion trends.

[Andrew Ross Sorkin]

I don't know about balloon trousers, balloon pants.

[Nae Mahraza]

I'm not wearing a ballpark. No, I was wearing them for the last interview. I'll show you after.

[Andrew Ross Sorkin]

Can men wear balloons? Balloon trousers?

[Nae Mahraza]

Yeah, for sure.

[Andrew Ross Sorkin]

Really?

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

Who makes them?

[Nae Mahraza]

I mean, all kinds of people. There's a really good. There's one company called Fried Rice that has a store in sale.

[Andrew Ross Sorkin]

Fried Rice is in there.

[Nae Mahraza]

They make like cool printed.

[Andrew Ross Sorkin]

Okay.

[Nae Mahraza]

Yeah, it's very trendy.

[Andrew Ross Sorkin]

I got something to do after this.

[Nae Mahraza]

Yeah. Next time you go see that fancy dentist, you're gonna have like little ankle showing for your guy.

[Andrew Ross Sorkin]

Yeah.

[Nae Mahraza]

Okay.

[Andrew Ross Sorkin]

This is gonna be like a running joke throughout the show now.

[Nae Mahraza]

No, we're gonna let it go.

[Andrew Ross Sorkin]

We're go. I see how this is gonna go.

[Nae Mahraza]

But I was reminded reading your book of these polls that the Wall Street Journal does with NORC or whatever, they ask people what values quote very important to you. Have you seen this in the latest one they did in 2023.

[Andrew Ross Sorkin]

I don't think I did.

[Nae Mahraza]

I'm.

[Andrew Ross Sorkin]

What did they say?

[Nae Mahraza]

I'm pulling up a chart and people will see it if they're watching on YouTube or whatever.

[Andrew Ross Sorkin]

Okay, this is now. Smart girl, smart question. So I don't know what to do here.

[Nae Mahraza]

So between 1998 to 2023, patriotism and religion fall from about 60%, a little above 60% to 40%. Having kids goes from being very important for 60% of people down to 20% of people in 2023. Community involvement goes up and then right after the pandemic, it just drops down. So it goes from 40 to 60 to 20, kind of. Or 30ish. And then one thing goes up. Money, money, money from. It goes from 30% of people to 50% people saying it's very important between 1998 and 2023. And I just feel like having spent eight years in the 1920s. Do you think this would be similar?

[Andrew Ross Sorkin]

Clearly the money side, yes. Community involvement. Not necessarily.

[Nae Mahraza]

Yeah, I thought it was so interesting. The characters in your book, a lot of them are like. One of the lines was, he wanted to give his wife the life she felt she deserved or something.

[Andrew Ross Sorkin]

Yeah, no, that's what I was gonna say. In religion. Look, John Rascob, you mentioned spaceships and some of these buildings going up. John Rasco built the Empire State Building. He was the Elon. I think of him as Elon Musk, very much of the twenties. But. But he was. He was a devoted Catholic. So I don't think that he would. He would sit here on the religion end and say, not important. I. I think the money thing is Is clear and I think part of it. Look, the human sort of element of this is sort of a FOMO. They didn't call it FOMO in the 1920s, but that's what it was. It was. You see your neighbor doing better than you're doing, and you're like, I'm a little jealous and envious of that, and I want that. And all of a sudden, this lottery ticket was available to people, and they thought, this is my way out. This is what I'm doing.

[Nae Mahraza]

As someone who deals with money all the time, who's covering through DealBooks, Swapbox, you hobnob with billionaires.

[Andrew Ross Sorkin]

I don't know about that, but sure.

[Nae Mahraza]

Do you know?

[Andrew Ross Sorkin]

Not really.

[Nae Mahraza]

But you have billionaire friends.

[Andrew Ross Sorkin]

I have billionaire friends. I don't know if I have a. I don't think. I don't.

[Nae Mahraza]

I have billionaire friends.

[Andrew Ross Sorkin]

Do you? Yeah, you. Good for you. Most of my friends are from high school, and a couple of them are doing well, but I don't think we're there yet.

[Nae Mahraza]

Your book party had a lot of rich people.

[Andrew Ross Sorkin]

Yes, yes, yes, that's true.

[Nae Mahraza]

So.

[Andrew Ross Sorkin]

But you're friendly in the milieu.

[Nae Mahraza]

Do you think that money has become our new God in the 2000 and 20s?

[Andrew Ross Sorkin]

So I think there's two things going on. So I have. I think money on one end is. Become just a necessity to keep up. And I think this gets to the whole sort of affordability crisis that people feel. And given that inflation is so high and wages haven't kept up, people just need actual money. Like money, there is an element of money makes the world go around. You need it. But I also think. I wonder whether it's a social function of social media, the sort of fomo, yolo. Everybody can see everybody and also see what you can't have. I think that makes money even more.

[Nae Mahraza]

Makes you more thirsty for it, makes.

[Andrew Ross Sorkin]

People more thirsty for it. Because I think a lot of people. People. This is now pre social media.

[Nae Mahraza]

You know, tell us about the olden days.

[Andrew Ross Sorkin]

No, I was gonna say, I think a lot of people didn't see it. It wasn't as visible. If you were walking down the streets of New York City, you didn't see what was going on inside the homes of these people and how fancy it really was or how ornate it was. You weren't staying at some ornate, fancy hotel, so you didn't know what that looked like.

[Nae Mahraza]

And you didn't even have access to the same schools that some of these people. You couldn't save and go.

[Andrew Ross Sorkin]

You didn't See it.

[Nae Mahraza]

There were gates also, there was gates.

[Andrew Ross Sorkin]

You just didn't see it. And now you pick up TikTok and you contour all of these things and it's constantly in your face. And so I think it creates both a FOMO and a resentment.

[Nae Mahraza]

Yeah. I want to play this clip you mentioned, Elon Musk. This is a clip with him. He's much more chill than he was when he was on stage with you in 2023 at DealBook. Okay, is low bar, but this is him speaking at Saudi American Investment Forum. That recently happened.

[Elon Musk]

But AI and humanoid robots will actually eliminate poverty and Tesla won't be the only one that makes them. I think Tesla will pioneer this, but there will be many other companies that make humanoid robots. But there is only basically one way to make everyone wealthy, and that is AI and robotics. Say, like in the long term, where will things end up? Long term? I don't know what long term is. Maybe it's 10, 20 years, something like that. For me, that's long term. My prediction is that work will be optional.

[Andrew Ross Sorkin]

Optional.

[Elon Musk]

Optional.

[Andrew Ross Sorkin]

So the crowd goes crazy, right?

[Nae Mahraza]

Yeah. Then he goes on to say about.

[Elon Musk]

Money, I'd always recommend people read yen banks, culture books to get a sense for what a probable positive AI future is like. And interestingly, in those books, money is no longer doesn't exist. It's kind of interesting. And I. My guess is if you go out long enough, assuming there's a continued improvement in AI and robotics, which seems likely, the money will stop being relevant at some point in the future.

[Nae Mahraza]

What do you think of that?

[Andrew Ross Sorkin]

I mean, I mean, I'm not smart enough.

[Nae Mahraza]

No, come on, you are.

[Andrew Ross Sorkin]

Here's my concern. I do imagine that AI is going to change our world, and I imagine robotics will change our world. I don't know if that's going to happen in, in 10 or 20 years. But the thing I would, that I'd worry more about is I imagine the spoils of all of this going to, this idea that nobody's going to need money is going to accrue to the shareholders and owners of the AI and robotic companies. Unless you genuinely believe that all of it's going to get redistributed some through some kind of, you know, universal basic income or something else that I don't know about. And most of those people that you know, whether it's Jensen or Elon, I think are capitalists. I don't think they're not going to be parting with the cash so quickly and saying, hey, we're just Going to give it to everybody. I'm not sure how that piece of it would. I would love to talk to him more about that.

[Nae Mahraza]

I would like to. I think he talks about the term universal high income, and I think Elon is certainly a capitalist, but also probably believes in some kind of. Like I always say about Elon, it's like someone who cares deeply about humanity, gives no fucks about humans.

[Andrew Ross Sorkin]

Yeah, that sounds about right. By the way, I was going to say, prior to the success of ChatGPT, you know, Sam Altman used to talk all the time about UBI and he.

[Nae Mahraza]

Did that pilot in Oakland.

[Andrew Ross Sorkin]

Right.

[Nae Mahraza]

It was. He was.

[Andrew Ross Sorkin]

So maybe, maybe we're all living in some kind of UBI utopia, but I just don't know what that ultimately feels like or looks like. And I do think that Elon has, in terms of his timelines, have always been aggressive.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

Let's just say.

[Nae Mahraza]

Did his 1920s corollary suffer from that too?

[Andrew Ross Sorkin]

John Rascob. No. John Rascob was like Elon, only in a different way. John Raskob, so famously, he's the one who actually changed the culture of America actually around credit and debt. So he was working at General Motors, running General Motors, and he decided, how are we going to sell more cars in America? We're going to loan people money so they can buy cars. Prior to that, it was like a moral sin to take a loan. People didn't even like to get a mortgage back then. Right. And once they started buying cars from General Motors with a loan, then Sears, Roebuck clocks, what's going on? They say, we're going to do this. And then Wall street says, okay, well, now we can do this too. And it really did change the whole psyche of taking on credit. So that was sort of his first invention. He then becomes an extraordinary investor, makes a small fortune, is then inventing the idea of the equivalent of maybe one of the first mutual funds that ever existed in the financial space. He then, by the way, like Elon, decides, I'm going to get into politics and supports. He loses. He's on the wrong side. He ends up losing to Hoover. He supported Al Smith for president, but then decides to spend basically all of his money for years trying to undermine the reputation of President Hoover secretly by the paying journalists and creating all sorts of secret schemes. Then he builds the Empire State Building. And he was like a philosopher king in that every journalist in America would come talk to him. And finally he comes up and I don't think he gets enough credit for this. We now have a five day work week.

[Nae Mahraza]

Right.

[Andrew Ross Sorkin]

He wrote a paper in 1929 that we should have. Back then, people worked six days a week. The stock market was actually open on Saturdays. Everyone worked on Saturdays. And he had this idea that we should not work on Saturdays. Not because he wanted to be nice to people, but because he thought that actually create a bigger consumer economy. If you had the weekend, more people would buy cars because they could go places, they'd buy gardening equipment. They would do different outfits to go to different events.

[Nae Mahraza]

How interesting. And the other thing that's fascinating is this is the time, the 1920s or the time where I will say celebrities become uglier, which is to say they stop being just athletes. Or I should say that's not kind. Celebrities become less good looking. They stopped being actors and athletes and Hollywood starlets.

[Andrew Ross Sorkin]

It's not all the beautiful people on the covers of magazines. It's now the deal book crowd. It's the. It's the business. It's the business folk, the business. This is. No, this was. It was true. This is when financiers for the first time are on the COVID of magazines and newspapers and they became their own version of a celebrity. It wasn't Babe Ruth anymore. It wasn't, you know, some beautiful actress.

[Nae Mahraza]

And it was. And people cared what they thought about. About everything. Like the way we do now. We care about what Elon thinks about.

[Andrew Ross Sorkin]

Right. We all care about what Elon thinks about now and what Sam Altman thinks and all the people who are Jamie Dimon on the COVID of these magazines that really started in the 20s. So Forbes magazine starts in 1917. Time magazine starts in 1923. The New Yorker starts just a little bit later than that.

[Nae Mahraza]

Yeah. And the New York Times has been around for a while at this point. How much of that creation is just money doing money's thing versus media doing media's thing.

[Andrew Ross Sorkin]

Oh, that's a great question. You know, I think it's probably like everything in life a combination of both. Clearly the business community realizes that they need to reach people, so they want to take advantage of the medium.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

And to the degree you think that media and journalism are trying to reflect what people are interested in.

[Nae Mahraza]

Yeah. That was a shiny object.

[Andrew Ross Sorkin]

That was. That was a new shiny toy.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

No joke.

[Nae Mahraza]

But one of the billionaires who we're so fascinated by, Mark Cuban, is somebody who's like a capitalist who is a proponent of universal basic income for caregivers. Right. Which I think is actually like a great agenda for the Republican Party to try to seize and implement right now. What I was shocked by is that when all these. When you have Doge and people like David Sachs and all these people from the AI world who've been immersed in some of the thinking about UBI have such an agenda in Washington, there didn't seem to be any forward movement on that kind of social safety net at all for this massive population.

[Andrew Ross Sorkin]

I do hope that if we all don't have jobs.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

Or the jobs we have today, that ultimately we are caregivers to each other. Like that would be what you'd hope for.

[Nae Mahraza]

And then we would, as a society, pay out in whatever form, barter or whatever it is.

[Andrew Ross Sorkin]

That's what you'd want.

[Nae Mahraza]

So this crash that happens, that sparked in 1929, but actually takes a long time to go on, you talk about in your book as the collapse was not a moment, but a relentless unraveling. Relentless. Can the cause of it be pinpointed, even if the timeline of it isn't pinpointed?

[Andrew Ross Sorkin]

Well, so I can identify the cause, but the cause is the confluence of four or five or six different things. The crash being sort of the first component part of it. So you have this sort of confidence sucked out of the system with a bunch of people who've now lost their homes or. Or mortgage their houses or out of work. But that's still a small, relatively small group of people. Interestingly, the stock market by the end of 1929 that year is only down 17%.

[Nae Mahraza]

I know that was wild, but that.

[Andrew Ross Sorkin]

Was like a head fake for the President, United States, and for everybody else who looked at the market as some kind of barometer of how things were going. Because what it missed was you could look at it and go, oh, things are okay. Except that all of the people who had bought on margin and taken out these massive loans, they weren't able to get back to the seven, even to the 17%, because they had already had to sell their homes to pay for all for the losses. When the stock market went down 50%, the bank didn't say, you can just hold on to that until it comes back up again. They said, you can't afford to do any of this anymore because you owe 10 times that.

[Nae Mahraza]

So the leverage is a huge leverage.

[Andrew Ross Sorkin]

It was the leverage that was a huge cost. So that's the first sort of piece of it. Then you get into the 1930s, and Hoover had promised farmers, who he had tried to get to vote for him back in 1928, that he was going to implement tariffs. That was his Whole thing. His whole thing was like, hey, guys, you vote for me, I will help you. I'm going to put tariffs on the table. By the way, every economist like today goes to Washington, begs the man, says, please don't do this. You're going to just destroy things.

[Nae Mahraza]

Every economist or every capitalist, Everybody, everybody.

[Andrew Ross Sorkin]

Economists, the bankers, I had diaries of these folks. Literally, they're talking about how they're on their knees begging this man, do not do this. Of course, Trade drops by 60% a year later.

[Nae Mahraza]

Yeah, okay, so that's a huge cause.

[Andrew Ross Sorkin]

So that's to throw that into the mix. Then you have a separate situation going on where he's, by the way, deciding to raise taxes. He also, interestingly, trying to jawbone. This is interesting. Sort of trying to jawbone folks into believing that the economy is better than it actually is. It's sort of very. By the way, it's very Trumpian and even very Biden. Like, in that, you know, people feel what they feel, they see what they see. And yet you have people out there telling you that it's not that way.

[Nae Mahraza]

But that seems like. I mean, I had Paul Krugman on, and we did this whole episode on, are we counting the economy wrong? Because it feels like that all the time. Like these indicators are not useful indicators for my own experience of life. And I feel lied to by government. Right. Which doesn't help trust. So he was an optimist seller.

[Andrew Ross Sorkin]

Totally. So you have this optimism seller on one end, by the way, the tariffs are not helping the farmers. So now the farmers are having their own problems. That's, by the way, hitting some of the smaller banks as it starts to.

[Nae Mahraza]

Right. Because of the farm debt.

[Andrew Ross Sorkin]

Because of farm debt. So now they're having their own problems. The Federal Reserve is sitting around on their hands thinking, well, we can't really do anything about this. When the truth is that the lesson that we learned. We learned it actually in 2008, though I think Ben Bernanke actually learned it because he did his PhD thesis at Princeton on the Great Depression, is when you have a problem like this, you have to throw money at the problem. The US did the opposite. They went into sort of austerity mode.

[Nae Mahraza]

Yeah, they need to go into pandemic mode where they were writing checks.

[Andrew Ross Sorkin]

Writing checks. Now, the other big debate that was happening during this period, though, was it wasn't clear the Fed technically could print money the way they do today, because back then we were still on the gold standard. So every dollar that we printed needed to be connected to gold. And there was a big debate, could we get off the gold standard? But nobody really wanted to do that. And then there were other things that didn't happen either, which was you could tell that the banks were going to start to struggle. You had these bank runs happening. And the right answer probably was to implement something like the fdic, something where you could insure deposits, but nobody wanted. Hoover didn't want to do it, by the way. Roosevelt didn't want to do it. They all thought this was a terrible idea because they thought it was going to create a moral hazard. Because there was no differentiation between a bank that took on crazy risk and was mismanaged entirely and some bank that was doing all the right things because the government, the taxpayer, was ultimately going to bail you out.

[Nae Mahraza]

Do you think that's true? I mean, we've seen these bailouts of banks that have done that. I mean, I know, like Silicon Valley bank, they wiped out the equity.

[Andrew Ross Sorkin]

But my answer is that it has ultimately been to the benefit of the country for us to have some safety net. It's not a safety net, by the way, that protects every account in its entirety. But for the average American that has whatever savings they have, a good part of it, if not all of it is protected.

[Nae Mahraza]

Okay, I want to take creative out of here because I have so many questions about this FDIC thing. So $250,000 is protected, right? If you.

[Andrew Ross Sorkin]

Now, back then, I think it was 10,000.

[Nae Mahraza]

Okay. It was so little. But if you have like 250, $1,000, should you keep $1,000 in a different bank or in a different. Under your mattress or whatever? Doesn't the bank. Don't they actually really insure it beyond 250? Like, haven't they actually, like, bailed out banks?

[Andrew Ross Sorkin]

Yeah. That's where your bank is, though.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

I mean, if you were. If we were. I have, you know, I live in New York City, so most. There's only sort of the big five banks in the country that are here now. Yeah. If I lived in a little town with a small bank that could maybe go out of business at some point. Yeah. They wouldn't be protected. And. And they'd be too small to fail.

[Nae Mahraza]

Right.

[Andrew Ross Sorkin]

So people would let them fail. So they would protect your 250, but they wouldn't protect the rest. It's interesting, I imagine if you have more than $250,000 at JP Morgan or Bank of America, I think those banks at this point are too big to fail. And those banks will be protected, likely by the government. In some way.

[Nae Mahraza]

This is not financial advice to anyone.

[Andrew Ross Sorkin]

It is not financial advice. There's like a little disclaimer thing.

[Nae Mahraza]

Yes, let's do that.

[Andrew Ross Sorkin]

And I could be totally wrong about this. So get out your salt shaker.

[Nae Mahraza]

Okay, so there's so much going on here that seems very similar to the 2020s, right? In terms of tariffs, in terms of leverage and financial innovations. I mean, we have crypto. It's great. Innovation.

[Andrew Ross Sorkin]

All the things, all the things, all the things.

[Nae Mahraza]

The poor banking structure and. And also what feels a little bit in your pages as this kind of like castrated government, like there is a group of people in the Fed sitting around and doing things. But the real things happen at these like Park Avenue homes where the financier of the day is like, is running the world, touring in people and running in the world. It's like these amazing rooms where it happened. But before we get there, I need to ask you, you talked about Hoover being, I would say, like this opioid of optimism dealer.

[Andrew Ross Sorkin]

Yes.

[Nae Mahraza]

And yet so many people in the book seem to know this was coming. So you have Coolidge, a one term president, saying he doesn't want to seek reelection. Cause he sees this coming, right?

[Andrew Ross Sorkin]

He thinks something bad's about to happen.

[Nae Mahraza]

A man of presidential ambition, willing to put it away because he sees it coming. You got Merrill of Merrill.

[Andrew Ross Sorkin]

Well, that's what he said. And then everyone assumes that in retrospect that that's why he.

[Nae Mahraza]

But did he say it before or did he say it after?

[Andrew Ross Sorkin]

He said it before. Yeah.

[Nae Mahraza]

Broken Croc is right. Maybe, I don't know. You've got Merrill of Merrill lynch who's.

[Andrew Ross Sorkin]

Trying to like sell off Charles Merrill telling everybody to get out.

[Nae Mahraza]

You've got like this Dr. Doom of his day, this economist Babson Nouriel Roubini of his time, shouting as the market's up 100% year on year that like, no, this thing is coming. Crashing. And so were there real fundamentals that could have gotten ahead of what these people saw? Or was it like a broken clock is right two times a day kind of situation?

[Andrew Ross Sorkin]

I think it's a little bit closer to the broken clock.

[Nae Mahraza]

Okay.

[Andrew Ross Sorkin]

I mean, this is the issue about Cassandras. So here I am now talking against my book. The truth is, most of the time the stock market does go up. It does. Over the last hundred years, it's just gone up. You would be much better off having been in the market the whole time than not. And so to catch it, right? I mean, here you have Charles Merrill he's sort of right and sort of wrong. He said that in 1928, the market went up 90% after he said it. So is he right? I don't know. And this is sort of the great challenge of timing the market. I see the Cassandras playing a hugely important role as sort of raising red flags that people need to be focused on all the time, but not necessarily, like, always do exactly what they say in that moment.

[Nae Mahraza]

Because, yeah, they're like curbs on the road, but they're not like a signal that you're on a cliff. Do you. But like this idea that the market always goes up, it's like, yeah, but it's incentivized to always go up. And it's. And we're incentivized to always find financial innovation, leverage, democratization, other ways of new instruments to keep this market going up. Like, how do we know the value of the actual things in the market?

[Andrew Ross Sorkin]

Oh, so I'm not. Okay, look, if you buy a. Let's do something very basic. You buy a farm.

[Nae Mahraza]

Okay. Yes. You know me so well.

[Andrew Ross Sorkin]

Yeah, you buy a farm.

[Nae Mahraza]

Yes.

[Andrew Ross Sorkin]

And at least over the years, let's say you had some cows on your farm.

[Nae Mahraza]

Yeah. I'm not going to make you do like a discounted cash flow of my future farm earnings for our audience. But isn't it like now stocks are a little bit more like art? Like the value is in the eye of the beholder.

[Andrew Ross Sorkin]

And like, I think there's certain stocks that are in the eye of the.

[Nae Mahraza]

Beholder and particularly in like private markets like venture capital.

[Andrew Ross Sorkin]

Oh, goodness. So. Yes. So anything. So right now, look, there's a public market.

[Nae Mahraza]

Yes.

[Andrew Ross Sorkin]

The stock market, which ostensibly should have some kind of price discovery because a lot of people should be buying and selling these things and hopefully making. Hopefully there's some relevance to what's happening in reality in the private markets, whether it's venture capital or private equity or private credit, people aren't buying and selling every day. And so the people who are deciding what something is worth on any given day, any given moment are the people who own it. There is a mark to make believe situation that is happening in America right now. No question. And then the question is, does that come undone? Or some people would say that it's a feature, not a bug, that these things can be held for a very, very long time at these market to make believe prices until they almost grow.

[Nae Mahraza]

Into them or like they get taken private again, then they come back on public. But just to give an example, like rent the Runway.

[Andrew Ross Sorkin]

Yes.

[Nae Mahraza]

Or, you know, some of these companies that came up as quote, unquote, tech companies and got venture capital and love the company. No shade on the company, but its market capitalization today is far lower than equity it raised. I don't even know. It might be that the founders. I don't know either way, but it might be that the founders walked away with money off the table. That is more than the current.

[Andrew Ross Sorkin]

There's a lot of what I call a story stock. A story stock is a company that has a great story that people want to buy into. They want to believe the dream. And, and by the way, very like every major AI company right now is a story stock. Private or public, doesn't matter. It's a story stock. People are believing something. You have to believe that these companies in 2028 or 2030, you know, for OpenAI stock or the valuation for.

[Nae Mahraza]

For OpenAI, which is how much right now.

[Andrew Ross Sorkin]

Oh, goodness. It's on its way potentially to a trillion dollars. We'll see. But their plan is to be profitable by 2030. And on their plan they would be losing $75 billion a year in 2028. So you have to basically have a swing, a $75 billion a year swing to profitability in the course of two years to get there. That requires a lot of faith.

[Nae Mahraza]

And then there's a huge amount of like real estate and other rush coming up under it. Like the AI infrastructure plans of America, all of the commitments, all these companies, cloud. We've all just like, I think suffered a sell off this week.

[Andrew Ross Sorkin]

Yeah. Because everybody who said who's going to. Because OpenAI and anthropic and every other big hyperscaler is going to have to pay the folks who are building the data centers money to do this. And the question is, will they have the money to actually do all of this? And that's a real question.

[Nae Mahraza]

Do you have an answer to the question?

[Andrew Ross Sorkin]

I don't think we really know yet. I think it. Look, here's the. So what they're looking at, just so it doesn't seem totally absurd.

[Nae Mahraza]

Right.

[Andrew Ross Sorkin]

Is they're looking at their own growth rate right now.

[Nae Mahraza]

Right. Of course. It's amazing.

[Andrew Ross Sorkin]

Yeah. And they're going, oh my goodness, things are going up by 5, 10x a year.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

And so if we stay at 5 or 10x a year.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

We're in the money.

[Nae Mahraza]

It's not even a hockey stick. It's just a line at some point.

[Andrew Ross Sorkin]

But if it doesn't, and that's what.

[Nae Mahraza]

We don't Know, we don't know. So I wanna do a quick lightning round where we walk through the other financial crises that have happened in recent years. And I want three things from you. What caused it, what we learned from it, and what we failed to learn from it.

[Andrew Ross Sorkin]

Okay?

[Nae Mahraza]

Okay. So 2000.

[Andrew Ross Sorkin]

These are smart questions. The name of this show is just so wrong.

[Nae Mahraza]

I'm sorry. 2000 to 2001, the dot com crash.

[Andrew Ross Sorkin]

What caused it was just severe overvaluation and a realization more than anything else that there was a problem. That problem was identified in part by some of the telecom companies. Fiber in the ground and things, because, by the way, those guys couldn't pay for what they were doing. So there's a little bit, a little bit of leverage in there, but not the kind of leverage that ultimately 2008 or 1929 spawned.

[Nae Mahraza]

Okay, so unrealistic valuation more than leverage.

[Andrew Ross Sorkin]

More.

[Nae Mahraza]

So what do we learn?

[Andrew Ross Sorkin]

Leverage is a piece of it.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

I think we learned that you got to be careful about the dream. You got to be careful about the dream. Pets.com was a dream. But by the way, the thing that's so crazy and why this is so hard to predict about is you go look at Amazon. I remember covering Amazon back then and there were headlines that would say Amazon.com or Amazon bomb. Because this was a company that con.

[Nae Mahraza]

C o n. I didn't hear that correctly.

[Andrew Ross Sorkin]

Yeah, because people didn't believe it was. It didn't make money. The company didn't make money. I mean, you could. Some people would say that that company. I don't want to say it was like OpenAI because OpenAI had to continue to raise new money constantly. Amazon wasn't raising money continually. But nobody had ever really seen a company that just didn't really make money and yet was valued as highly as it was. They had not created AWS yet. And so, you know, you see that on one end and you see pets.com on the other and you go, okay, okay. Who are you going to believe in and how do you know? It's hard to know.

[Nae Mahraza]

So what did we not learn from that crisis that we should have learned? Or is that too hard? Is that too like, Is that too big a question? Maybe it's not too big a question.

[Andrew Ross Sorkin]

I think we. Well, the other thing that happened during that period though is we also realized there were some things that were taking place in the financial machine of it all. This goes to sort of the Wall street piece. You know, back then analysts were writing these fluffy reports about the companies and were getting paid for the reports because they were doing the IPOs. I mean, this goes. There's sort of a. There was a bit of a financial chicanery situation going on. This is. Anytime the markets get sort of super hot, Wall street oftentimes does things that they should not be doing.

[Nae Mahraza]

So they're selling their own future financial book, basically.

[Andrew Ross Sorkin]

A little bit. Yeah. I mean, this is, you know, back in the day, Henry Blodgett. This is what Henry Blodgett got in trouble.

[Nae Mahraza]

Oh, yeah.

[Andrew Ross Sorkin]

He was working at Merrill lynch, and he was an analyst, and he was writing these reports, and he was telling people that certain stocks were better than they probably were, in part because he.

[Nae Mahraza]

Knew that he'd be doing the transaction.

[Andrew Ross Sorkin]

That Merrill lynch was going to be doing the IPO, and they were getting bonuses based on how many IPOs they were getting. And so, you know, some of those things I think we did learn from.

[Nae Mahraza]

So some shenanigans and.

[Andrew Ross Sorkin]

But you always need to be watching for the shenanigans on one end. Right.

[Nae Mahraza]

Okay. Okay. So then the global financial crisis to 2008. I'm going to skip over the Asian financial crisis and the Russian.

[Andrew Ross Sorkin]

Okay. Way over leverage.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

This goes maybe to the American dream. We totally double down on housing.

[Nae Mahraza]

We.

[Andrew Ross Sorkin]

We all believed that everybody should get a house. Then we did policy things that sort of made it incent. Created crazy incentives for banks to provide loans that they shouldn't have been providing. The truth is, also, we blame it. We blame everybody else. The American public took on loans that they shouldn't have taken on either.

[Nae Mahraza]

There was like a moral hazard.

[Andrew Ross Sorkin]

There was a serious moral hazard. And then, you know, most of the banks sort of started. Have FOMO about each other and started to just sort of. It got wild and out of control.

[Nae Mahraza]

Okay, what did we learn and what did we not learn?

[Andrew Ross Sorkin]

What did we learn? We learned that you need to have much higher capital requirements and you need to really be minding the store and that you need to change the incentive structure for all of these things. And I think actually, largely in the aftermath of. Of that period, we. We did that.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

What did not. What. What did we not learn?

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

Well, I think there's a real question about the people who were involved in it for the most part. Many of them still have their jobs. And so did they learn something from this?

[Nae Mahraza]

No accountability.

[Andrew Ross Sorkin]

Was there accountability? And look, I would argue it's almost a political issue, the bailouts. In fact, what Ben Bernanke did and what the government did, I would argue is actually a very Good thing. From an economic perspective, it was the right thing to do. Some people don't believe that, but it.

[Nae Mahraza]

Pissed people off a lot.

[Andrew Ross Sorkin]

Like Occupy Wall Street. But I believe what happened in 2008 in some ways led to a complete shift in America around their thinking about experts, expertise.

[Nae Mahraza]

For sure.

[Andrew Ross Sorkin]

Some people will tell you that there's a direct line between 2008 and the election of Trump in 2016.

[Nae Mahraza]

Yeah, I think that's not. I mean, I would kind of concur, probably. There's a lot of distrust in the system and.

[Andrew Ross Sorkin]

A lot of distrust.

[Nae Mahraza]

Yeah, a lot of distrust.

[Andrew Ross Sorkin]

I think actually a lot of the stress. I mean, by the way, we had a whole second set of distrust during the pandemic. But I think a lot of the stress started after 2008.

[Nae Mahraza]

100%. What about COVID 19, the 2020 recession? That was, like, kind of a. Less blamey.

[Andrew Ross Sorkin]

It was less blamey. And I'll tell you why it was less blamey.

[Nae Mahraza]

Mm.

[Andrew Ross Sorkin]

I remember being shocked that. So pandemic happens, and all of a sudden we start bailing out everybody.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

I mean, PPE loans.

[Nae Mahraza]

We're even bailing them out before the airlines.

[Andrew Ross Sorkin]

Everybody's. Everybody gets. It was literally like Oprah with her. You know, you get a car, you get a car, everybody gets a car. And there was no pushback. And I remember being shocked by that, because having lived through 2008, I remember all the finger pointing everybody's saying. And I. In retrospect, I think it was because everybody got a car.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

Meaning in 2008, part of what was happening was it seemed like the banks were getting the money and the individuals were not. Right. Hank Paulson. Ben Bernanke's view was that the most practical, efficient way was we give the money to the banks, and then the banks eventually will come out, trickle down. It'll trickle down into the system. Right. And of course, homeowners and others were saying, well, it's not trickling down to me in the pandemic. We just started sending checks to everybody, so nobody really had place to complain.

[Nae Mahraza]

Right, okay. Yeah. I mean, that's kind of the way that America does accountability. I had, very tragically, a friend who passed away in the Miami Surfside building. My culture, mate. And. And, you know, if you look at. Yeah, it was terrible. And her brother lost his parents and his sister in that night. And I think about it a lot because, you know, fast forward, there have been these payouts, you know, like, 10 million person, maybe. I can't remember what the payout Was. But like, you don't. I still like to this day, don't really know who is accountable. Did the building code structure change? Like, are homeowners associations under different obligations now to consider is something about the way we do accountability which is so broken, which is like, yeah, kind of like we pay out reparation. I mean, there's so much of that happening in this book in Europe, et cetera. But we don't plug the problem well.

[Andrew Ross Sorkin]

But I will say that is often true. Interestingly to me, after 1929, we didn't have accountability in that, you know, most of these characters did not end up in jail. A couple of them did get arrested and two of them end up in jail. But oddly for other things. But we did actually get some form of accountability in the form of the SEC for the first time. So insider trading all of a sudden is illegal. And all that was totally legal back then. I mean, all the manipulation, the shenanigans, that there was nothing wrong with it. People didn't even think it was amoral back then to get into that. But, you know, then you had Glass Steagall, which broke up the banks in terms of commercial banks, Investment Banking added FDIC Insurance. 1940, you get the Bank Act. Now you have capital requirements. So things did happen that changed the game after the crisis in 2008. And by the way, after 2001, things did happen. Elliot Spitzer, of all people, is responsible for the fact that so many bankers, the analysts are no longer allowed to do what happened in that period of time. So there were things. Then 2008 comes along, we get Dodd Frank, we get stress tests, we get all sorts of other legislation. And the truth is that changed how banks loan money and has inspired what is now the. Maybe the scarier part today, which is we have a whole new industry called private credit.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

And so most of the loans pre 2008, if you were a business, you'd go to a big bank, you'd say, give me. Give me a loan. Now you don't go to them. You actually go to these private companies that are basically not regulated because they're. Dodd Frank has nothing to do with them, and they loan you the money. And as a result, we now live in a less transparent world because we are always fighting the prior war and we're missing the next one.

[Nae Mahraza]

It's like failure of the last analogy. When I look at all of these things, I think there is often this financial innovation instrument. There's a band aid put on and there's a new thing that comes along always. And as Winston Churchill is so idealizing in this book, the American well, he.

[Andrew Ross Sorkin]

Thinks this is a feature, not a bug. 100%.

[Nae Mahraza]

He's like, it's not meant to prevent these crises, it's meant to survive them. And he writes to his English critics, they're dummies. They should be, you know, following the American way. What do you think is the financial innovation that we're seeing now? Or like the. What is the leverage or the, the thing that exists right now in our market that is dangerous. A little cliffhanger. We'll be right back, guys. Today's sponsor, Dumb Question is from me. I'm going to take the next minute to tell you a little bit about smart girl dumb questions and to ask you for your help in continuing to make independent, fact based and curious journalism. No, I'm not gonna ask you for money. Here's what I need. I would love you to tell 10 of your friends about the show or 100, I don't know, blast that reunion group that you muted. And definitely tell your mom and tell your mom to tell her friends too. Even if you don't like the show and you're just like, hate watching it or listening to it, tell 10 of your friends to hate watch it too. Numbers are numbers, people. What do you think is the financial innovation that we're seeing now? Or like the. What is the leverage or the, the thing that exists right now in our market that is dangerous. And this could be your wild card that you alluded to earlier or it could be something else.

[Andrew Ross Sorkin]

Let me throw the wild card in a second. Okay, so I think there's a whole bunch of new financial products. Look, a couple years ago was really the sort of popularization of SPACs, these blank check companies. That was sort of a new product. A lot of people got excited about that. They thought that was like a lottery ticket. And invariably we didn't have the right guardrails around them. The product a SPAC could work if you actually incentivize people right. Properly, you have the right transparency around who's getting the fees, how much they're getting, why this is working, when they can sell, how they can make projections. But we didn't do any of those things.

[Nae Mahraza]

Yeah, these are specialized purpose acquisition vehicles.

[Andrew Ross Sorkin]

Correct.

[Nae Mahraza]

Like Chamath Palpatiya, Others.

[Andrew Ross Sorkin]

Chamath Palihapatiya and others. Basically they would raise money. They're called a blank check company because you would raise money for a blank check and then they would go out and buy something and then you would Basically get whatever they bought.

[Nae Mahraza]

Yeah, but the people who led this back were making 20% down.

[Andrew Ross Sorkin]

They were taking money out almost irrespective of what was happening.

[Nae Mahraza]

And Trump's truth social that companies.

[Andrew Ross Sorkin]

That was an example of it too. Exactly. And most of them, I mean, like 90% of the SPACs basically failed.

[Nae Mahraza]

Are done.

[Andrew Ross Sorkin]

Okay, so. Okay, so that's an example of something.

[Nae Mahraza]

What about something that's happening right now?

[Andrew Ross Sorkin]

So one of the things that's happening right now is after the Genius act, which was passed earlier this year, there's a whole new move to basically make private equity investments and venture capital investments and private credit available to the public. So effectively taking what are private assets, whether it could be a podcast company, it could be a nursing home, it could be a hospital, it could be apartment building, whatever it is, and making them available so that they're wrapped up like in a fund that then you could buy in the retail market. The difference is most public companies have to disclose what's going on in each company. This won't be like that. It'll still be like a private equity fund. So there'll be sort of private assets without the disclosure in the public markets. What's even more complicated about them is a lot of them are described, are, are called semi liquid vehicles. Not to get you really confused, but you're so smart, asking all these smart girl smart questions that they're semi liquid because you can buy them. Looks like a stock. You can buy it on any day.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

But if too many people decide to sell it at the same time, the fund can say, excuse me, we're not allowing you to sell the stock today.

[Nae Mahraza]

They can force you to hold.

[Andrew Ross Sorkin]

They can force you to hold. They can put up the gates. They can put up gates because the only way they can actually send you cash when you sell your is either they actually have to sell down the assets they have, which are hard assets, which they can't typically do, or more people have to give them money. And some people would say that looks like a Ponzi scheme, if you will. So. And that's going to be a new product and that's. That's like the next big thing.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

And I'm sure that some will work and some won't work. And at some point in life, some regulator will say, you know what, these products are not bad products, but they just have to be done slightly differently.

[Nae Mahraza]

Is there anything that is like, feels risky now, but is going to be completely normal in 20 years? Like the way leverage buyouts.

[Andrew Ross Sorkin]

I think those will actually be. I think everybody will have a piece of those. I just think the difference is if you're. The problem with those instruments is if they tell you that you can't get your money back and you're a retiree and you need the money, that's no good. It may be that the right approach to those kinds of instruments is to say, you know what they're part of, like a target dated investment fund. And based on your retirement age and for the last 10 years of the fund, you can't be in those because you can't get your money out. Something like that. But let me throw one major wildcard into this whole scenario, which is if in fact we have some kind of crash crisis or something else, the lesson that we keep getting taught is we need to throw money at the problem. The government needs to throw money at the problem. The Federal Reserve needs to throw money at the problem. And so far that has seemed to work out just fine. Back in 1929, when you would have wanted to do this, we had a budget surplus in this country. Okay? We now have so much debt. Yeah, meaning I'm talking about sovereign debt. Forget about the corporate debt. We now have so much the sovereign debt. The US government has so much sovereign debt that I wonder whether there's some red line that at some point there's a crisis. We say, you know what, we're going to write a check for a trillion, $2 trillion to this or whatever it is. And at some point the investor class that buys Treasuries, that buys bonds says, excuse me, I see what you're doing. We like you people, we're very happy to continue loaning you money, but you're going to have to pay us a lot more for the risk that we're taking. And if the interest rate starts to really fly, all of a sudden you can get into a vicious cycle where you can really get into an austerity situation for the whole country. So that's the thing that is the wild card. And I just don't know when you hit that red line. I always thought we would hit that line a long time ago. And it may just be that the world is relative and that people say, well, the US is still better, it's doing better than Europe.

[Nae Mahraza]

That's a big variable between 1929 and 2026, which is like, it's not a monopoly by America anymore. It's a kind of, you have this multipolar world order that's emerging. You have real champions potentially out of AI that are Coming out of. You have resource constraints that are not reliant on America.

[Andrew Ross Sorkin]

That's the piece of this puzzle that I think is like the true unknown. Unknown.

[Nae Mahraza]

So you think that's scarier than an AI bubble? Are we in an AI bubble?

[Andrew Ross Sorkin]

We're probably in an AI bubble, and the AI bubble probably will pop, but that doesn't mean that AI will not be with us 20 years from now. Like the Internet bubble popped and the Internet's even more important than it is today. So the flip side of AI, which maybe goes back to your, your tape with Elon Musk, is there's the AI bubble and what happens if it fails? There's also the. Like, what happens in success?

[Nae Mahraza]

Oh, yeah, you've been reading the culture box, right?

[Andrew Ross Sorkin]

Because in success, you know, if we don't, we're not needed, then what? So that's why that one may be more of a double edged sword than I fully appreciate.

[Nae Mahraza]

What about crypto? How risky is crypto?

[Andrew Ross Sorkin]

I mean, look, what I don't know is bitcoin has held up all of this time. I always, you know, Warren Buffett and Charlie Munger used to call it rat poison. It is a belief system. It is. There is a, you know, the cynics or the naysayers would tell you that, you know, you get quantum computing going and all of a sudden the encryption that makes Bitcoin work can be broken, can be hacked, or something happens. And then what happens to that money? Having said that, it's still a small piece of the puzzle. It's only a couple trillion dollars. So it's not that the whole economy comes undone, but I think if the air really came out of that part of the world, it would also invariably come out of other parts too.

[Nae Mahraza]

Okay, I'm gonna do quick lightnings on this. Your last book, Too Big to Fail.

[Andrew Ross Sorkin]

Yep.

[Nae Mahraza]

So the banks were too big to fail. The big banks were too big to fail. What is the modern entity that is too big to fail? Whether it's a singular AI company, whether it's a stablecoin, whether it's a specific type of fund or the idea of.

[Andrew Ross Sorkin]

A country, I think some of the banks are still too big to fail. Back then, the phrase was only used in the context of financial institutions. Now we talk about cities, municipalities, states, countries. Too big to fail. I do think that maybe cloud computing, oddly enough, has become too big to fail. So the last time that, you know, there was an AWS outage or something, where like the whole world for three or four hours has stopped those Companies largely are now too big to fail. If they were to fail, we would have. They're like electricity.

[Nae Mahraza]

And is that a good use of taxpayer money to bail out the too big to fails?

[Andrew Ross Sorkin]

I think ultimately it is, but because the truth is, what's the alternative? They're providing either water or the equivalent of electricity to everybody. And so if they're a choke point in, like, the entire society, it's a little bit like airlines. We bailed out airlines during the pandemic because you need those planes in the sky for the entire economy to work, because people need to get from place to place to place. Otherwise, the whole thing sort of breaks down.

[Nae Mahraza]

It presumes that the entire economy needs to work. Well, that's like the big philosophy. I mean, sometimes, like early on in crypto, when I was. When I was at Stanford and all my friends were, like, buying bitcoin, and I didn't. I made some really bad decisions in my life, but financially, but great emotional decisions. I remember thinking, like, at the end of all of this, and particularly with daos and things that, oh, like, at the end of this, we're all going to be in this, like, barter, universal, like, kind of like the culture, books, ish kind of world. I don't know if it's so different to.

[Andrew Ross Sorkin]

I've never been to Burning man, but I haven't either. But I'm told. I'm told that that's the barter society.

[Nae Mahraza]

Yeah. But I think that there is a world in which we move back to that. Like, if AI liberates workers or AKA steals their job, however you want to say it, like, if we can create a system where people can become guitarists and work as a barista because they have health insurance, AKA Madrid, you know, is that a better society? Like, do you need to be doing the things that we, as New Yorkers think is just so fucking normal to do?

[Andrew Ross Sorkin]

I think I'm gonna go to Burning man this year just to figure this out. I think I'm going on a journey, a spiritual journey. I can't give you an answer just yet. Can I come back next year?

[Nae Mahraza]

This isn't really dumb.

[Andrew Ross Sorkin]

Can we go. Can we both go to Burning man and then do the show from there?

[Nae Mahraza]

Yes. We'll have to barter to have people podcast for us and all the things and provide that. Okay. Does the government have, like, more ability to fight off a future crisis or less than in 1929 or 2008? We're talking about this and you're about to respond.

[Andrew Ross Sorkin]

I think more because the world is. Well, it depends how the crisis unfolds. If it's specific to us, probably more. Because you might even have allies of ours try to help us. If it's everybody all at once in a sort of true global crash crisis, maybe a lot less interesting.

[Nae Mahraza]

Who do you think has more trust right now? You operate in the intersection of media, business, government to cover it. See what's happening?

[Andrew Ross Sorkin]

We're all on the floor.

[Nae Mahraza]

Yeah, everyone's on the floor.

[Andrew Ross Sorkin]

We're on the floor. Yeah.

[Nae Mahraza]

The individual.

[Andrew Ross Sorkin]

Is there a basement?

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

Can you fall off the floor?

[Nae Mahraza]

You can fall off a floor into the basement. I mean, there's this real, like, you know, anger at billionaires these days. And I was seeing that there are a thousand new billionaires minted in the last five years, 400 of them immediately after 2020. Like in the year 2021 was the highest number of billionaires ever minted.

[Andrew Ross Sorkin]

By the way. We're gonna have a whole bunch more in 2026.

[Nae Mahraza]

Really?

[Andrew Ross Sorkin]

Yeah.

[Nae Mahraza]

Why are you becoming one after Burning Man?

[Andrew Ross Sorkin]

No, because anthropic and open air, they're not already. Because they're all going to go public.

[Nae Mahraza]

Right.

[Andrew Ross Sorkin]

And so they're actually, to the extent that they are billionaires now, they're going to have their liquidity events.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

So they actually could be genuine billionaires.

[Nae Mahraza]

If you're not paper billionaires. When will we have our first trillionaire?

[Andrew Ross Sorkin]

I think Elon's on his way.

[Nae Mahraza]

Yeah, he's like 400 to 600 billion right now.

[Andrew Ross Sorkin]

Yeah. But we'll see what happens if SpaceX goes public next year as well. Depending on where you think that heads. It would not surprise me if we get there pretty quick.

[Nae Mahraza]

There's a very powerful scene in your book. There's this moment in 1912 where J.P. morgan, John Pierpont Morgan is testifying and he's asked about his own power.

[Andrew Ross Sorkin]

Yes.

[Nae Mahraza]

And what does he say?

[Andrew Ross Sorkin]

He doesn't think he has power.

[Nae Mahraza]

Yeah. He says, I do not know that I do or something.

[Andrew Ross Sorkin]

So I remember reading that and thinking to myself, that's pretty much how I think most people feel, even the people who have the most power in the world.

[Nae Mahraza]

And you think that's still true today?

[Andrew Ross Sorkin]

I do.

[Nae Mahraza]

And when you look at like I.

[Andrew Ross Sorkin]

Think if you were to sit here with Elon Musk or Jeff Bezos and say, do you feel on any given day that you actually have power, like true power? They don't even think they're successful.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

It's a very strange. It's like a mind F. Only because.

[Nae Mahraza]

No.

[Andrew Ross Sorkin]

People think that if you have all this money and you have these titles in your business card, that you should feel success. Not that you should feel successful, you should feel powerful. You should also feel responsibility for the great power, some obligation. The obligation, all those things. It's not that I don't think they feel that, but I think on a day to day basis, I think that they don't.

[Nae Mahraza]

At your book party, a lot of old guardians, people, Michael Bloomberg, whatever, blank fiend, et cetera. But then there's the young crowd, Sam Altman, Mark Zuckerberg, et cetera. Do you see a difference between that generation or are they all in the JP Morgan? I don't feel successful. I do not know that I have the power.

[Andrew Ross Sorkin]

Look, I'm of the view that most people of this sort of shoot the moon success, one of the reasons that they've been able to shoot the moon is, is that it comes from. They're still trying to prove themselves.

[Nae Mahraza]

Yeah. The insecurity there is that. Yeah.

[Andrew Ross Sorkin]

And they're trying to get to the top of the mountain. And even when you think that they're at the top of the mountain, they're not just like skiing down the mountain. It's not like, I'm done, they saw.

[Nae Mahraza]

The next one, I gotta get to.

[Andrew Ross Sorkin]

The next one, or I gotta stay at the top of the mountain. And so they feel some kind of pressure, even though the rest of the world doesn't feel that they should feel that pressure.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

And I don't think the money, I'll say this, I don't think the money is emotional armor. In fact, I almost think it's like anti armor. I often think about that because I think the public looks at these people and says, oh, screw them. And you can say whatever you want and this and that. And they feel it on the other end. Like they, they feel the speed bump in like a, you know, it's like there's, there's, there's no suspension on the car. Really. I think that's true. But you said about the responsibility of the young, young, young versus there's a.

[Nae Mahraza]

Generational shift at all or less more. Because it seems like in the last, you know, we started this 1998-2023, you know, all these other norms, religion, patriotism, everything has gone down.

[Andrew Ross Sorkin]

I don't know. Because a lot of people who've sort of given to philanthropy and done a lot of the things that, you know, take a Michael Bloomberg, who I actually think has done extraordinary things, most of the philanthropy that he was doing at this sort of level. He's doing. It has actually been in the last. Call it, decade or two of his life. Same thing with Warren Buffett, I was gonna say, but call me when Elon Musk is 60 years old or 65, whether somehow it shifts then and I don't know the answer.

[Nae Mahraza]

These guys want to live to be 260. So we'll call you that.

[Andrew Ross Sorkin]

Oh, yeah. So maybe it's going to be a different. The timeline will be different.

[Nae Mahraza]

We'll see. Okay, I want to do a lightning round on media, which happens in this book. And then I want to talk to you about DealBook and then we're going to get out of here. But. Okay. Did the media have more trust in 1929 or in 2025?

[Andrew Ross Sorkin]

Media had more trust in 1929.

[Nae Mahraza]

Really? Okay. Did they trust their.

[Andrew Ross Sorkin]

Probably for the wrong reasons.

[Nae Mahraza]

Yeah. Because they were bought and paid for.

[Andrew Ross Sorkin]

Well, they were bought and paid for, but the reason they had more trust was that people didn't have any real sense that they were bought and paid for.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

And there weren't as many media outlets. And so the amount of communication, the amount of technology that we have today to be able to question everything at any given moment. I mean, one of. By the way, one the.

[Nae Mahraza]

Of.

[Andrew Ross Sorkin]

One of the reasons we had a crash in 29 was because the technology sucked, literally. Because the stock market itself, the exchange, oftentimes the stock prices during the crash on the big board were actually wrong. They were like hours off. The reason why you remember when you see all those pictures, those famous pictures of people in 1929 standing outside the New York Stock Exchange, like on the covers of the newspapers, the reason thousands of people are there is because they've come down there to find out what's happening to their money. Literally, because you couldn't find out. And so today you have it on your phone. And the only reason I say that is I think people trusted the media then because it was the only thing you could trust.

[Nae Mahraza]

Yeah. It wasn't like information.

[Andrew Ross Sorkin]

There wasn't 100 other places you could go.

[Nae Mahraza]

There's this line in the book where one of the reporters says, since becoming a journalist, I've heard the advice to believe nothing until it has officially been denied.

[Andrew Ross Sorkin]

I love that.

[Nae Mahraza]

I love that too. As a journalist. Do you think there's truth in that?

[Andrew Ross Sorkin]

Pretty much.

[Nae Mahraza]

The public also, like, they have all these, you know, they're suspicious of the media.

[Andrew Ross Sorkin]

Right.

[Nae Mahraza]

They could be suspicious. Oh, your book party, Andrew Ross work, and you had these billionaires there therefore are you in the pocket of. How do you think about that as you do your job? I mean, as you said, your friends are from high school. Journalists have no friends, famously. Right?

[Andrew Ross Sorkin]

Oh, you mean just.

[Nae Mahraza]

Yeah. How do you think about like access, proximity, coverage?

[Andrew Ross Sorkin]

Look, I think my job is to be the ultimate fair weather fan. So if you do something good, I am very happy to say attaboy. And if you do something bad, I am. My job is to hit you over the head. Yeah. And that's the gig. And I do think that access to some degree is important insofar as being able to actually capture the nuance. I do want to know these people. I do want to know these people. I know. By the way, I also know journalists who don't want to know anybody.

[Nae Mahraza]

Yeah.

[Andrew Ross Sorkin]

They prefer to be as far removed as humanly possible to have no connection or relationship with that person. And by the way, I think there's a value to that too. So I think that you can have a big tent on this. But I think it's important and I think that hopefully people respect and listen to some of the things that I report and say because I understand the nuance of the person's motivation or their incentive system. So there's sort of, you can see it on both ends of it and disclosure is everything.

[Nae Mahraza]

It's like.

[Andrew Ross Sorkin]

And I think disclosure is super important.

[Nae Mahraza]

And also like the ethical standard you hold yourself to because you know all this information about the markets but you can't trade an individual stock.

[Andrew Ross Sorkin]

I don't own any individual stocks.

[Nae Mahraza]

If you did, do you think you would outperform Nancy Pelosi?

[Andrew Ross Sorkin]

No, I'd probably screw it up. I have a running joke that actually the long term policy of CNBC and the New York Times has probably advantaged me.

[Nae Mahraza]

What would you have bought? Go back in time so you're not moving any market.

[Andrew Ross Sorkin]

The only thing that I was write about was when I think I was in middle school, I told my father to buy Nike.

[Nae Mahraza]

Oh really?

[Andrew Ross Sorkin]

That's a great idea.

[Nae Mahraza]

Oh wow. Did he.

[Andrew Ross Sorkin]

And I think he did.

[Nae Mahraza]

Oh, wow. Good for you. When you go to Burning man, when we have this epiphany on Burning man, you're going to be, you know, then you'll, you'll see what's coming next. The barter system, all this documentary, there's.

[Andrew Ross Sorkin]

Lots of drugs involved.

[Nae Mahraza]

Exactly.

[Andrew Ross Sorkin]

Okay.

[Nae Mahraza]

Do you think it's possible that all of these systems are just broken? Like capitalism, media, the way the distrust is so high right now. Do you think capitalism is broken?

[Andrew Ross Sorkin]

So I don't believe that capitalism is broken. I think that the current version of the way we're regulating it, managing it, handling it as a society is a little off kilter and we need to sort of redirect it. That goes to tax policy, that goes to some of the social safety net stuff, that goes to some of the rules of the road, that goes to some of the competition politician stuff. But I ultimately think that capitalism, much more so than I think any real effort, socialism over time, and I think I'm saying this almost empirically, like not as an opinion, seems to have been the more successful route.

[Nae Mahraza]

Do you think some of these moves that Donald Trump is making, like 10% of oh, my gosh, intel or a percentage of Nvidia sales to China to be determined, are those good movements more.

[Andrew Ross Sorkin]

In the Ken Griffin camp, who, by the way, is a Trump supporter, historically, that these kinds of things typically end badly.

[Nae Mahraza]

Okay, rapid round of listener questions. Rebecca Shapiro, what will be the first sign of an AI bubble bursting?

[Andrew Ross Sorkin]

The first sign of an AI bubble bursting will be some AI company, maybe not big, maybe small, that either announces that they're having to pull back on their spending in a major way. That might actually be the first sign that'll be the first time somebody announces that they're pulling back on spending in a big way or that whatever their original plans to their original plans to build more data centers slows down. It'll just be. It'll look like that and then we'll cause a rethink.

[Nae Mahraza]

Okay. Woman named Alexander Taylor. Taylor taught 05. When is the pop? And what do we do in the meantime besides go to Burning man and get foot massages?

[Andrew Ross Sorkin]

When is the pop? I think we still got a ways to go.

[Nae Mahraza]

Okay. A Brooks Brother. Is this farming subsidy a bailout? Will the farmers sell?

[Andrew Ross Sorkin]

Is Brooks Brother wearing from Brooks Brothers?

[Nae Mahraza]

I don't know. He's a person who follows us on social.

[Andrew Ross Sorkin]

Okay.

[Nae Mahraza]

He said, I think it's interesting. It's Brooks Brother.

[Andrew Ross Sorkin]

That's cool.

[Nae Mahraza]

He's probably wearing balloon pants from Brooks Brothers. Is this farming subsidy a bailout? Will the farmers sell their crops to the government or dump. I didn't even know about the farming subsidy. I have to be honest.

[Andrew Ross Sorkin]

Well, there's a question about whether they're really going to get a subsidy. And there's also a question, by the way, about whether the Chinese are really going to be buying all these soybeans. I don't know if you've been following this.

[Nae Mahraza]

Not at all.

[Andrew Ross Sorkin]

So the president said that China has agreed to buy something like 13, 12. 13 million metric tons of soybeans by the end of the year. It's the middle of December, and They've bought like 331,000.

[Nae Mahraza]

Oh, yes. Yeah.

[Andrew Ross Sorkin]

And so now there's a whole thing about was it really the end of the year or the end of the growing season? And so now we got to find.

[Nae Mahraza]

Out when soybeans grow.

[Andrew Ross Sorkin]

Okay, we'll see about all of this.

[Nae Mahraza]

Brendan Flutter, AKA be flood hay b Flood habe flood.

[Andrew Ross Sorkin]

What's going on?

[Nae Mahraza]

Ask asks a question about your friend Ken Griffin.

[Andrew Ross Sorkin]

Not friend.

[Nae Mahraza]

Be honest. Who is Bobby Axelrod of Billions based on Ken Griffin? Steve Cohen.

[Andrew Ross Sorkin]

So honestly, really not one person or even multiple people. And I know nobody wants to believe that, but when I was first starting to think about this is really in like 2011, before even some of the Steve Cohen stuff was happening. Now as the show got closer to getting on the air, there were obviously lots of different people we were thinking about just little. But I think of him as a singular character. I honestly, I've always thought that. And I think Brian and David, who are our showrunners and co creators, they did an extraordinary job sort of making him singular.

[Nae Mahraza]

Okay. Belle and Basket asked who does your hair? I mean, really. This is.

[Andrew Ross Sorkin]

I do my hair. I don't have anybody who does my hair.

[Nae Mahraza]

Really.

[Andrew Ross Sorkin]

I mean, like, oh, like get a haircut.

[Nae Mahraza]

Yeah, just do your hair.

[Andrew Ross Sorkin]

I get a haircut every couple weeks.

[Nae Mahraza]

Okay, you want to shout out to the guy or just Dentist Torres that we're giving shout out to?

[Andrew Ross Sorkin]

Her name is Asuko.

[Nae Mahraza]

Oh, Asuko.

[Andrew Ross Sorkin]

Okay. Yeah, she's great.

[Nae Mahraza]

Apparently Belle and Basket likes it. Okay, quick lightning round. What the hell was happening at Dealbook this year?

[Andrew Ross Sorkin]

Which part?

[Nae Mahraza]

Okay, Alex Karp going wild. AI clip of him hand. What is actually going.

[Andrew Ross Sorkin]

I just want to be clear about that.

[Nae Mahraza]

You know for a fact.

[Andrew Ross Sorkin]

No, I just have covered him. I've interviewed him so many times. He just was excited to be there.

[Nae Mahraza]

What was going through your mind, though? Did you sense it was ridiculous?

[Andrew Ross Sorkin]

No, I didn't sense it was ridiculous. This is the way he thinks and this is the way he talks. I have a great. Honestly, in all of those types of conversations, I almost try to put myself in their shoes. I have great empathy for whatever their position is. I honestly don't sit there in judgment the way I know the audience does.

[Nae Mahraza]

Yeah, they really do. But I think it's just the meme moment. Did you know at that moment that would be a meme?

[Andrew Ross Sorkin]

I'M not good at memes, so I don't know. I have kids. They're better at that.

[Nae Mahraza]

Maybe in middle school when you bought Nike would be good. Okay. With all your empathy, did you feel empathy for Gavin Newsom when he was sitting in an uncomfortable position and the Internet became concerned about the governor's testicles?

[Andrew Ross Sorkin]

I have to say I totally missed that from the angle that I was sitting at here. I'm probably gonna get this. I'll be a meme after this, too.

[Nae Mahraza]

When Halle Berry dissed Gavin Newsom, did you know that would be a newsworthy moment? You weren't on stage for that, so it's funny.

[Andrew Ross Sorkin]

I wasn't on stage for that. And I was actually coming back in the back and I thought, wow, that was pretty. That was something.

[Nae Mahraza]

Yeah. Did you invite Donald Trump to Dealbook this year?

[Andrew Ross Sorkin]

I did not.

[Nae Mahraza]

Would you like Donald Trump there?

[Andrew Ross Sorkin]

Sure. I'd love to interview the president. I interviewed the president just over the summer on television.

[Nae Mahraza]

But you've had. But over the course of your career, you've had multiple interactions with him or just.

[Andrew Ross Sorkin]

Oh, yeah, you know, he used to come on Squawkbox. Oh, my goodness. Many, many, many years ago. Decade, maybe a decade and a half ago, when the Apprentice was on, he used to come on. We used to have a thing called Trump Tuesdays where he would call into the show and we'd talk about real estate, the Kardashians, whatever was going on.

[Nae Mahraza]

Didn't he once Truth Social. Something very angry about you. More recently, you're no good on tv. Andrew Ross Workin.

[Andrew Ross Sorkin]

More recently, I had said something that he did not like. Yes.

[Nae Mahraza]

And you've repaired.

[Andrew Ross Sorkin]

Have you ever repaired? Who knows?

[Nae Mahraza]

Maybe he'll come to Burning man, too.

[Andrew Ross Sorkin]

Maybe we'll bring the president to Burning Man.

[Nae Mahraza]

Okay, who's the most surprising reader of Dealbook or viewer's Squawk Box?

[Andrew Ross Sorkin]

The most surprising reader, Dealbook. I remember being surprised that LeBron James reads DealBook.

[Nae Mahraza]

Oh, I'm not surprised because I feel like he and Mav are such good business people.

[Andrew Ross Sorkin]

Yeah. But I remember a couple years ago there was a deal or something and somebody called me and they're like, there's going to be this news story. You want to get an interview? You know, he reads Dealbook. And I was like, oh, no, I didn't know that.

[Nae Mahraza]

I had every episode of Smart Girl. Dumb questions asking my guests who know so much, much more than me, what they are dumb about.

[Andrew Ross Sorkin]

Yes.

[Nae Mahraza]

Do you have such a thing?

[Andrew Ross Sorkin]

I'm dumb about so many things. It's kind of crazy.

[Nae Mahraza]

What's a question that you have that you haven't asked out loud or you haven't bothered to figure out over eight years of writing a great book about it.

[Andrew Ross Sorkin]

So I'm uniquely dumb about music.

[Nae Mahraza]

Oh.

[Andrew Ross Sorkin]

So I grew up in New York listening to things like Z100. Z100.

[Nae Mahraza]

It's a radio station.

[Andrew Ross Sorkin]

Pop radio station.

[Nae Mahraza]

Okay.

[Andrew Ross Sorkin]

Or like WPLJ 95.5. So I. So when people talk about music around me, I'm like a dunce because I just have no idea about anything.

[Nae Mahraza]

We have an episode for you.

[Andrew Ross Sorkin]

Yeah.

[Nae Mahraza]

With Jacob Collier.

[Andrew Ross Sorkin]

Okay.

[Nae Mahraza]

And he explains music. He explains music like rhythm, melody, harmony. Like, I'm also a dunce about music. They gave me the triangle in world music class, and in Indonesian music class, I had the gong because it was like a regulated one time per song.

[Andrew Ross Sorkin]

Did you ever play an instrument?

[Nae Mahraza]

The triangle and the gong?

[Andrew Ross Sorkin]

That's it? Nothing. Okay. I played the saxophone in middle school, but was so worried that I was going to screw up the rest of the band that oftentimes I wouldn't blow into them.

[Nae Mahraza]

Oh, my gosh.

[Andrew Ross Sorkin]

Because I was so scared that I was gonna make the whole thing so terrible.

[Nae Mahraza]

By the way, this also puts your metaphor about Michael Lewis, like printing pages on a piano, playing pages of writing, in such perspective for me.

[Andrew Ross Sorkin]

There you go.

[Nae Mahraza]

I have empathy for you.

[Andrew Ross Sorkin]

Thank you.

[Nae Mahraza]

I'm with you on that. Thank you so much. Andrew Osterkin. The book is called 1929. It is excellent. I recommend it because I never have book people on the show. And it is great.

[Andrew Ross Sorkin]

Thank you.

[Nae Mahraza]

You can find him on squawk box, on CNBC, on DealBook, at the New York Times, and on the socials. Your Instagram is blowing up. Must be the haircut.

[Andrew Ross Sorkin]

Gotta go get a haircut. Thanks.

[Nae Mahraza]

Thank you so much, Andrew.

[Andrew Ross Sorkin]

Thank you so much. So, okay, so you got it. And then now at some point, you have to tell me about the business of podcasting.

[Nae Mahraza]

Yeah, I can tell you about.

[Andrew Ross Sorkin]

Yeah.

[Nae Mahraza]

It is so weird how every one of my podcasts, even the ones about financial crises, end up talking about feet. Do you think my podcast is a foot fetish? Anyways, I love Andrew Ross Sorkin. He is so talented. I love this kind of storyteller he is and how nerdy he is he is. The fact that he spent eight years kind of in the archives pulling together this book and the parallels it draws to today. I entered this conversation kind of dumb about financial crises and what causes them. Having a sense of the headlines, but less of the story. I left the book certainly much smarter about 1929, and I left this conversation much smarter about the underlying similarities between all of these things. And with such a so many more questions about our hubris, the hubris of our markets, like the possibility of our government to actually regulate these. And also like really curious about the wild card that he talked about sovereign debt and this big game changer of how like the geopolitical world order, which is something I know something about, has to do with the financial order of things, which is something I know very little about. So tons of questions about that. I hope Andrew will come back on the show, but you know, probably he's just busy at Burning man getting a foot massage for the next year or so. But that's it for today's episode of Smart Girl Dumb Questions. I want to know what you think. Do you think that the AI bubble is about to burst? Do you think crypto is frothy? Do you think the wildcard situation is going to come true? What are your dumb questions? Send them all to me. I'm namearaza101mail.com. You can leave a comment below. You can call our hotline at 1-855-MYDUMBQ and leave me a voice note and your question could be on the show. Today's episode was produced with Desta Wonderad of Wonder Studios and Melissa Lee Gibson and mixed and engineered by the awesome Johnny Simon. Our theme music is by David Kahn. Special thanks to Claudia Riccardi and Healy Cruz. I'm Neymar Raza. See you next week on Smart Girl Dumb Questions.

[Andrew Ross Sorkin]

I'm just worried I'll never be able to write another book again.

[Nae Mahraza]

What is I think I loved at the end of your at the end of the book it's like no part of this book may be used as artificial intelligence intelligent.

[Andrew Ross Sorkin]

Yeah but but because AI was too late for me for this book. But my only point is I feel like in five years from now people will like there'll be bajillions of books because you just write it with AI.

[Nae Mahraza]

I don't know you had the archives I think the that archival sense the.

[Andrew Ross Sorkin]

By then people will have some have find a way to digitize out this stuff.

[Nae Mahraza]

Sam.