Podcast Summary:

The Master Investor Podcast with Wilfred Frost
Episode: Andrew Ross Sorkin: Echoes of 1929 and The Leverage Behind Every Crisis
Date: November 4, 2025
Guest: Andrew Ross Sorkin (Author, CNBC Anchor, Founder of DealBook)
Host: Wilfred Frost

Overview

In this engaging episode, Wilfred Frost sits down with Andrew Ross Sorkin to discuss his new book on the 1929 crash, draw parallels to the present investing landscape, and pull lessons about risk, leverage, optimism, and human nature from financial history. The episode is a blend of storytelling, historical insight, and practical wisdom, exploring how cycles of boom, leverage, panic, and recovery repeat—but with crucial differences in every era. Sorkin shares behind-the-scenes tidbits from his years-long research process, dives into character studies of key historical figures, and wrestles with what lessons from 1929 still matter in today's turbulent markets.

Key Discussion Points & Insights

1. Leverage: The Match That Sparks Every Crisis

• Sorkin opens with Jamie Dimon's quote: "A financial crisis is something that happens every seven or eight years" (00:00).
• Key idea: Leverage is the core accelerant in any financial crisis, past or present.
  • In 1929, the average American could buy stocks with 10:1 leverage, pledging homes or collateral often not understood in full.
  • Today’s institutional leverage is tracked, but hidden pockets of risk—especially in private credit—remain concerning.
• Notable Quote:

  “To me, the match that lights the fire of every crisis is the leverage… We don’t know where the leverage lies because so much of it lives in private credit today.” – Andrew Ross Sorkin (00:43, 27:18)

2. Writing the Book: Challenges of Bringing History to Life

• Eight years of research: Sorkin details the headaches—most primary sources were deceased, requiring detective work through archives, letters, diaries, and family contacts (03:09).
• Breakthrough: New York Fed’s board minutes from the era were released after a legal tug-of-war (04:40).
• Quote:

  "The hardest part about this project was everybody is dead, so there's nobody to call... It required going to several dozen different libraries and museums..." – Andrew Ross Sorkin (03:44)

3. The 1920s Stock Market: Culture, Technology, and Madness

• Stock trading used to be a physical, high-drama experience:
  • Specialists on the NYSE floor took orders via phone—“when you saw those images of people screaming, that was real.” (05:22)
  • The “curb market” literally operated on the street.
• Leverage’s social normalization: Taking a loan was once seen as a moral sin, until consumer credit became part of the American way (08:07).
• Stock market culture: Widespread retail participation with extreme leverage—risk appetite that dwarfs today’s cautious retail attitudes.
• Quote:

  “You would walk in, you could put down a dollar and they would loan you $10. So it was often a 10 to 1 bet on a stock.” – Andrew Ross Sorkin (08:57)

4. Tech, Communication, and Political Messaging

• Hoover & radio: The first U.S. president to effectively use mass communication in politics, akin to Trump’s later use of social media (13:03).
• Historical echo: The struggle to distinguish economic reality from messaging—a timeless leadership challenge.

5. Regulators, Central Banks, and the Politics of Intervention

• Fed reluctance: The U.S. Federal Reserve in the 1920s/30s was new and politically cautious; feared backlash for either raising rates (choking off credit) or flooding the system with money (14:52).
• Gold standard: Rigidity of the gold link prevented the kind of crisis response we expect today.
• Contrast with now:
  • Multiple fail-safes now exist—central banks, SECs, bank capital rules—but new vulnerabilities (private credit, government debt) have replaced old ones.
• Quote:

  "There really was a lot of people within the Fed effectively sitting on their hands during this period and ultimately didn't do what I think we all have now learned is the lesson, which is when you have a crisis... flood the system with money." – Andrew Ross Sorkin (15:03)

6. Crash & Aftermath: Key Moments and Decisions

• Key event: October 24, 1929 (“Black Thursday”)—bankers try to buoy the market, but the scale of leverage and panic is unstoppable (16:36).
• Could the Fed have stopped it? Some damage maybe—but the true devastation unfolded after, as dominoes fell through 1932 (17:19).
• Most investors lost everything due to leverage, not just stock declines (18:02).
• London’s role: Power center, Bank of England’s interventions, and the double significance of key British figures (Winston Churchill’s fascinating cameo unfolds below).

7. Winston Churchill: A Character Study

• Churchill’s American tour: Financially motivated, he caught the market fever and lost money in the crash—yet came away admiring American resilience (19:32–21:23).
• Memorable Quotes:

  “He was impressed by America’s unshakable faith in a golden future… The American speculative machine… is not built to prevent crises, but to survive them.” (Churchill, as relayed by Sorkin, ~21:49)

8. Echoes of Human Nature in Booms and Busts

• Boom psychology:

  “Long, uninterrupted booms like the one in the 1920s produce a collective delusion. Optimism becomes a drug or a religion or some combination of both…” – Andrew Ross Sorkin (23:19)

• It's always human nature: "Every seven or eight years, people lose their head. People believe this time is different." (23:19)
• Lesson: History rhymes, even if it doesn’t repeat.

9. Parallels to Today: Are We in a Bubble?

• Host’s worry: Frost admits to bearish views but recognizes that mass warnings may actually prolong the boom (24:10).
• Sorkin responds: Bubbles can last longer than we expect, and calling a top is futile. Referencing 1999 and 2008 bubbles, he draws distinctions but highlights our ongoing ignorance about hidden leverage today, especially in opaque private markets (27:11).
  • Quote:

    “The bigger question, and I don’t think we know the answer right now… is how much leverage is really in the system… The match that lights the fire of every crisis is the leverage.” – Andrew Ross Sorkin (27:11)

• Safeguards today: Sorkin notes the modern financial system has “learned lessons”—from regulations to the end of the gold standard—which makes a multiyear depression less likely, but not impossible (29:20).

10. Extraordinary Historical Characters

• Charles Mitchell: Sorkin calls him a Milken/Dimon hybrid—a banking celebrity who “really popularized” retail investing on credit; ultimately became a villain but transformed the field (30:48).
• Thomas Lamont (J.P. Morgan), Andrew Mellon (Treasury), John Rascob (GM/Empire State Building): Each exemplifies different facets of ambition, optimism, or caution.
• Modern echoes: Jamie Dimon praised for “character above all else”—seen by Sorkin as sincere, unlike some of his predecessors (32:34).

11. On Writing, Legacy, and Career Lessons

• Sorkin’s anxiety: Success of "Too Big To Fail" made this new book daunting. Motivation was to “prove to myself that I could [do it again],” not to issue a warning about a coming crash (34:59, 36:05).
• Career takeaway:

  “Things take time. Remember the three T’s... There’s a value to patience, too.” – Andrew Ross Sorkin (37:15)

• Eight years to write; wisdom in patience.

Notable Quotes & Memorable Moments

• “A financial crisis is something that happens every seven or eight years. Every seven or eight years, people lose their head.” – Andrew Ross Sorkin, repeating Jamie Dimon’s story (00:00, 23:19)
• “You would walk in, put down a dollar, and they would loan you $10. So it was often a 10 to 1 bet on a stock.” – Sorkin (08:57)
• Churchill on the crash:

  “Impressed by America’s unshakable faith in a golden future… the American speculative machine… is not built to prevent crises, but to survive them.” (21:49)

• “Long, uninterrupted booms… produce a collective delusion. Optimism becomes a drug or a religion…” – Sorkin, reading from his book (23:19)
• “Things take time. Remember the three T’s." – Sorkin's career advice (37:15)

Timestamps of Key Segments

| Timestamp | Topic & Key Exchange | |-------------|--------------------------------------------------------------------------------------------------| | 00:00 | Sorkin on recurring financial crises & importance of leverage | | 03:09 | The pain and process of researching a book about dead protagonists | | 08:07 | Leverage in the 1920s becomes social norm; the rise of consumer and stock loans | | 12:16 | Panic of investors, slow technology creates chaos in the crash | | 13:03 | Hoover, radio, and parallels to Trump’s mastery of mass media | | 14:52 | Central banks’ constraints, politics, and why the Fed didn’t intervene | | 17:19 | Could the Fed have stopped the 1929 crash? The limits of intervention | | 19:32 | Churchill’s adventures, market losses, and his admiration for American resilience | | 23:19 | “Collective delusion” in booms—Sorkin’s thesis on optimism and risk blindness | | 27:11 | Parallels between 1929, 1999, 2008, and today—what’s different? | | 29:20 | Today’s safeguards—no gold standard, SEC, bank regulation—but new unknowns | | 30:48 | Charles Mitchell, character studies, and Sorkin’s comparisons to Milken and Dimon | | 32:34 | Jamie Dimon’s focus on character; a rare leader in Sorkin’s view | | 34:59 | Sorkin’s nerves about following up “Too Big To Fail” with this new book | | 37:15 | Sorkin’s career advice: “Things take time. Remember the three T’s.” |

Tone and Style

Throughout, the conversation is lively, accessible, and inquisitive, marked by Wilfred Frost’s friendly yet probing questions and Sorkin’s storytelling, historical depth, and candid self-reflection. Sorkin balances optimism about progress with humility about what isn't known and cannot be predicted.

Final Takeaways

• Optimism pays—until it doesn’t: As Sorkin and Churchill both note, optimism has generally been rewarded in American markets, but that doesn’t mean risk is dormant.
• History is a lesson, not a prophecy: The study of 1929 is about humility, not alarmism; Sorkin resists drawing simplistic warnings.
• Leverage is timeless and always dangerous when misunderstood or hidden—regardless of era or asset class.
• Patience—career-wise and investment-wise—remains a quietly powerful virtue.

Recommended for:
Anyone interested in financial history, investing psychology, or the parallels and contrasts between past and present market booms and busts—as well as fans of narrative nonfiction and deep-dive journalism.