One of the big technological problems in 1929 was that the 'big board' at the New York Stock Exchange would often fall behind by hours. So you could be looking at the board thinking that you knew the score, what the price of the stock is, but it would literally be hours off. And that's if you were physically on the floor of the exchange.

The folks on the floor were then calling all the brokerage houses around the country, and even uptown in New York, to tell them what the numbers were. And so their numbers were hopelessly out of date. And when you see pictures of thousands of people on the streets of Wall Street, those famous pictures in October of 1929, the reason there were so many people in the streets, people had gone down there physically because they wanted to see what was actually happening to their investments, because you couldn't call somebody. There was no app to look at. And that unto itself created a real dilemma.

Putting aside what was going on, by the way, on some of these boats, people were trading on boats. Those guys were half a day, a day, they're sending pigeon carriers pretty much the way the stock price.

Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.

And I'm Tracy Alloway. Tracy, it's been a theme in a lot of our episodes lately, but we are in an age where trading and speculation is just part of the culture. We know that stocks are up, we know that a lot of things are up, but that's different than being part of pop culture, which it is now. It's a culture of lines. Lines going up. People watch the lines.

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

Yeah. Any given moment.

Well, this was one of the things about Bitcoin. It was so volatile. There was actually something to watch. There's like an entertainment factor. But of course when you get this kind of speculative activity everyone starts worrying about when's it going to end. It's the crash.

I have this theory that nobody likes bubbles, that basically if there is a bubble, there are two camps of people. One camp that is really upset that they're missing out on it, and one camp that is really anxious that they're going to miss the top, and that there are actually very few people in the camp where it's like, oh, this is really good. I'm really happy.

I assume the people who nailed the timing are pretty pleased with themselves. And there's like five of those. Yeah.

Yeah, absolutely.

Okay, so famous crashes. We're going to talk about one of them. I remember the dot-com era very well. I don't remember the market environment we're going to talk about, the 1920s. You have no memory of that. Shame on you.

I don't remember 1929 very well. I did read John Kenneth Galbraith, his famous book, The Crash. But there is a new book out on the great stock market boom and then crash of 1929. We are going to be speaking with the author, someone I'm thrilled to talk to, someone whose accomplishments and work ethic puts us all to shame.

We're going to be speaking with the one and only Andrew Ross Sorkin, founder of Dealbook at New York Times, co-creator of Billions, co-host of Squawk Box CNBC. I made that joke about Jim Ryan as if I'd never heard the network. And now the author of 1929 Inside the Greatest Crash in History and How It Shattered a Nation. Andrew, thank you so much for coming on at lunch. Thrilled to have you here.

Thank you for having me. I feel like I'm a long time listener, first time caller.

Amazing. Thank you.

How do you, so this isn't the first time 1929 has been written about. And the Galbraith book, it's probably those up until now, probably the most. It was a great book. Yeah. What was the impulse to go back and write a book about this, this period of time?

To be honest with you, it was about ten years ago. I had written Too Big to Fail. People used to ask me because I had written about the financial crisis of 2008. They'd ask me questions about 1929. And the truth was, I didn't really have answers because I sort of knew, I think, like most of the public today, that something pretty bad happened. Then.

I had read the Galbraith book, but sort of beyond that, I was lacking details, and I honestly, I went on a vacation and, you may think there's like a nerdy vacation thing to do. I, downloaded some books to Kindle, and I brought some more with me all about 1929. I sort of pored through them, and I thought to myself, why can't I understand who the characters are? Like the people at a visceral level? Like, what were they saying to each other? What were their motivations for their incentives? Who was sleeping with who? What was really happening here?

And, you know, I grew up sort of loving books like, you know, That Word and by Michael Lewis or Jim Stewart with, with Den of Thieves. You mentioned A Night to Remember or. Well, a Night to Remember with the Titanic was a great example of a book that really sort of made things feel human. Right. And so I thought, you know, what? Could somebody and maybe it was me do that to 1929.

And the truth was, I wasn't sure I could. One of the reasons I think there's so long is, was the entire time I wasn't sure. And when I first started it, actually, I mean, started doing the research or many of the archivists that I went to visit with were like, Andrew, we've read Too Big to Fail. That kind of granular detail, it's just too hard to find. And by the way, all the people are dead, obviously. So there's nobody interviewing you. You're really reliant on letters and notes and memos and transcripts.

And the truth is, there wasn't like two or 3 or 4 major archives. You could sort of go excavate. And so this turned into this sort of bizarre, years long project of putting these puzzle pieces together.

I can only imagine how much archival research you had to do for this book. It is very filled with texture and personality and lots and lots of details.

Is there a particular character that kind of stuck out to you in this book? And I'm, you know, I've read about Charles Mitchell. He's sort of the villain. But then towards the end of it, you have a sort of more nuanced opinion.

So I think there's a couple characters. And the truth is, I would also say one other thing, because then you will probably end up talking about today, like modern day today. When I started writing this book, I never even thought about today. I was thinking, really about then.

I didn't think I was because if this is the top this year, you nailed the book, but the so.

But as I was working on this, these characters to me, like Charlie Mitchell who ran a bank on National City was become Citigroup. You know the parallels to me between him, he effectively invented sort of modern credit for lending, if you will, to individuals to go and buy stock. I mean, to me, he would back then he would have been as famous as a Jamie Diamond of today. He might have been the Michael Milken of his time. In certain ways, he might have been even like a dick fold, kind of character from Lehman Brothers.

So I was fascinated with Charlie Mitchell, and he was actually one of the hardest, characters to really write, because there really is no archive. He didn't keep his own notes. It was really dependent on actually finding other archives of letters and things that he, participated in. He was on the board of the New York Fed, and I was able to get the minutes from those fed meetings for the first time. And that really actually sort of grounded the project.

I became fascinated by John Rascoff, who to me is like Elon Musk in the 1920s. He was everywhere all the time. Philosopher king. Helped, run General Motors created really credit at General Motors, which really changed America. That's actually when people started taking on credit for the first time.

Goes on to play the market, goes on to get involved in politics. He actually tried to undermine Hoover's reputation as sort of a muskie kind of way, if you will, and then goes to build what was then the equivalent of a spaceship in the Empire State Building. And meanwhile, I, I don't know if he gets credit for it, but he really did, to some degree, come up with the idea at least, or became an advocate for a five day workweek in America. People forget that were six days back then, and he thought it was an equity would be an economic boon because people would have go and spend your money, go spend money to buy cars. They'll have to go play golf. Time to go places, do all sorts. So I thought he was fascinating.

And then the last person, Carter glass. Carter glass of Glass-Steagall, Glass-Steagall fame. He was a senator in Virginia. By the way, he helped create the bill that led to the creation of the Federal Reserve. But he was the Elizabeth Warren of his time, and he used to rail for years about this thing called Mitchell ism and this idea that Charlie Mitchell and the creation of debt and leverage and the system was what was going to undo it.

And it seems like they really transport a lot of people in industry really sort of transported this consumer notion that was nascent and just like, yeah, let's put it over.

I didn't appreciate that back then. I mean, brokerages were springing up on the corners of streets the way they're like Starbucks in New York City is really fun. I always think about these or like the brokerage on a cruise is like, would be fun to just walk in and play the market. You mentioned lounges in like hotels, women only stock trading lessons, which, you know, I would go for those. Nowadays they don't have to be women only, but just the place for thing.

That was nuts though, is you would show up and you could give them a dollar and they would literally lend you ten. I mean, that's what we're talking about. Yeah. And so when the market was going up, it really was like free money. And I think this was the first time this was ever really happening. And so people didn't fully appreciate all the things that were possible.

Let's just say there's another parallel with today, which is a lot of the stock market being driven by AI. Right? And when people talk about the market opportunity in AI, it's basically uncapped. It's the entire world. It's like all of business. And in the 1920s, people were saying stocks were going to go up because the entire world was buying into the US.

I think that's very true.

I would actually specifically point actually to a technology story back then, which was radio. Radio. The ticker symbol was radio. The company was RCA. They also, by the way, not only had the technology for radio, they had the patents for television. And that was the Nvidia. I mean, that was the meme stock, of that era, because people were buying into this future that we were all going to experience, and they wouldn't have been wrong, by the way.

The conundrum is, I think the stock split adjusted at the peak was like got to 530 some odd dollars and by 1932 was like $3.

Obviously, when radio, come to RCA, you're like, oh, it's the Nvidia of the time. Nvidia makes a ton of money and it makes more money every year. Well, we don't know how sustainable that is because some of that is them investing in companies which come back and buy Nvidia.

But setting that aside, vendor financing was radio making. It was RCA making a ton of money. Or was it mostly excitement about the future? Do we have radios financials from the 20s?

So the bad news is we don't. In fact, somebody said to me, the other day, did you ever get a chance to look at the prospectuses of these stocks? And I said, prospectuses. They they hardly had leaflets. I mean, and that's if they had anything, they literally would be leaflets that they would hand to their PS ratios going the it was very hard to get real information.

Again. This is pre the creation of the SEC, the kind of rules and regulations and just disclosures just didn't exist in the same way that they do today.

So would you just get like a check in the mail for a dividend every once in a while. Like what access did you actually have.

So my understanding is that you would get a check in the mail. In fact, oftentimes it wouldn't come in the mail. You'd actually go to the brokerage house itself. And in some cases they would keep that for you and sometimes either reinvest it or keep it on like a ledger, if you will. But I don't know, the specifics exactly of how of how you would, deal with your dividend.

Yeah. When it, if you got it.

One thing I really like in the book is all these different characters from American, from world history. You telling the story of them getting really obsessed with the U.S. stock market. So Winston Churchill, on an early trip to the United States gets really into margin trading, I think, like you're talking about Groucho Marx and getting really. And so to me, that was also like a great surprise. And that was also not something I had read about.

I had no idea that Winston Churchill shows up in New York, actually just been in the US even before this. But in New York in October of 1929, he was actually down on the floor of the stock exchange, visiting. While this was all happening, he was totally engrossed in trading. He was trying to make money. He ends up losing, losing money, of course, like everybody else, he ends up going to a dinner with all the leading bankers. The night that the market completely and utterly tanks.

And similarly, I didn't know about it either. But, you know, Groucho Marx was living in Long Island and basically I should say that he was living on land, but he would, according to his son, he was really living at a brokerage house trying to reshape every day. And he ends up having to, mortgage his home to pay for the margin calls when they called.

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

The great Jesse Livermore? There's been a lot written about Jesse Livermore. Just. Livermore was a character in this book. Of course, I don't know if we should give away the ending for those who don't know, but Jesse Livermore ultimately shoots himself in the head. In 1941 over at the Sherry Netherland. There's a lot of people shooting themselves in the head in this book. There's a lot of shooting, jumping out windows and other things.

But, you know, Jesse was a short seller and he was spectacularly successful in the crash itself. The truth was, though, he had been super successful in parts of the 20s and then was actually quite a quite a failure in most of 27 and 28 and 29 because the market kept going up and he was almost out of business. And then he goes back in, in, in, in the fall of 29 and makes something like $100 million plus. But of course, like I think any of these sort of super emotionally, complicated people, he ultimately loses it, I mean, quickly and then, you know, makes makes it a little bit more, loses a little bit more, makes a little bit more, and then loses. Well, everything.

You said that when you started this book, it would, you know, you started a decade ago. So it was not about some attempt to make a parallel today, even though the timing may be things are very crazy these days.

Many people would say when you as a. I've always been curious about this when I read history of any sort, the brain can't help but try to find parallels to this. I think, at least for me, it's like, oh, this is just like this. There's just like this. When you're doing the process of writing history, do you have any mechanisms in place to avoid the temptation to sort of over draw parallels? Because that must be incredibly tempting to find the details that feel salient and similar today. This is the Nvidia of the time. This is the Cathie Wood of the time. This is the whatever.

So yes and no. I think it wasn't until two years ago when I was getting closer to being finished, and also to recognizing what was happening in the moment today. And the parallels started to seem clearer and closer. So three and four years ago, actually, it didn't feel. Yeah, as similar, oddly enough. But all of a sudden you're starting to see these debates that they're having in literally the spring of 1929 about whether to raise or lower interest rates and how they're going to try to end speculation within the New York Fed and to some degree, the political pressures that are around them. And you start to say, well, that seems kind of I, I've been hearing a lot about that.

So I was I hesitated to sort of overdo it. But I also was cognizant that I imagined readers who were reading it might think about some of these things. And one of the decisions we made in particular, I remember having lots of debates with my editor about was nowhere in the book did we ever want to stop the reader and take you out of 1929. Say, hey, by the way, this is kind of like that, or this is kind of like that. Some readers may see these parallels or different things themselves. Some may never see them, and some may come up with completely different parallels. And I would love that.

Frankly, I have a parallel. Okay. So, something that happened slightly after the crash is Smoot-Hawley, right?

Yes. The tariffs.

And today we are in the Trump administration with a very broad, widespread tariffs. And that wasn't on my bingo card when I was writing that originally. I'm curious how much of the subsequent Great Depression would you attribute to those sorts of economic policies versus the stock market crash itself?

So I actually think there was a lot of bad decisions and dominoes that came after the crash itself. That really is what put us into the Great Depression. So I look at the crash and and really, only the first half of this book is about the crash itself as sort of the first domino of a series of things that were sort of the necessary ingredients to create the depression.

So, you know, when you think about all of the bad decisions, the tariffs are one of those decisions. You know, the idea that Andrew Mellon, who is our Treasury secretary, who was effectively saying, you know, let these capitalists eat it, they were speculating, let them suffer. You know, when you think about the fact that the fed really did very little at the time and almost sat on their hands, in large part, I would argue, because the fed was such a new institution. People forget who was born in 1913, that they were cognizant of the political pressures. If they were seen, they couldn't have pulled off a Volcker like moved. They knew there was speculation that if they had said, okay, we're going to really just raise interest rates. By the way, it wasn't they were going to lose their jobs. I think they actually feared that maybe there wouldn't be a fed.

So I think there was sort of the confluence of all of these different things. We talked about the gold standard. I mean, there's sort of a series of things that that take place that lead eventually to 9000 banks going out of business and unemployment at 25%.

It's interesting, speaking of the fed, because these days there's all this question of like, we're looking at financial conditions, we're looking at real economy, etc. it's interesting how maybe the fed didn't do enough, to curb speculation, or maybe at some point it was, didn't do enough to counteract the downturn, but they were very keyed in to the rate on margin lending as one of their main tools that they had in their toolkit.

So that was their big tool or what they thought was their tool. However, they didn't really use it. And so you had this sort of fascinating debate happening in the spring of 1929, when they're sitting there saying, there's too much speculation. We need to end the speculation. How do we do that?

Well, the decision they came to effectively was to send out letters to banks saying, please stop lending to speculators. General suasion, right. To which the bankers said, what are you talking about? How do you define what speculator is? What what isn't? One some of the banks were so scared that they effectively stopped lending that unto itself was a problem. And then you had people like Charlie Mitchell, who, by the way, in that moment, you would have compared to Donald Trump saying actually lower interest rates, please.

So I think there was this sort of fascinating dynamic that you could sort of see play out again, these are some of the details. I don't think I understood the texture of of what really led to all of this.

There's another parallel. Speaking of the fed, this might be, you know, pressing it, stretching it a little bit, but I get the sense that nowadays people feel that the fed can come up with any solution to any problem. Right. We've seen them roll out tons and tons of different programs, whether it's for corporate credit or repo treasuries, that sort of thing. In the 1920s, there was a sense that America had beaten the boom bust cycle, right? Because there was another crash previously, which was 1907.

Look again, I think this is one of those things where, because of the 1907 experience, which, by the way, was solved effectively by JP Morgan taking a bunch of bankers and trapping them in a room until they could figure out what they were going to do, led to a sort of sense of overconfidence and not just overconfidence, a sense among certain men, men of a certain group, if you will, that if you could just put the right people in a room together, we could solve anything.

Thomas Lamont was effectively running JP Morgan during this period. JP Morgan himself had died. His son Jack was the CEO in name, but really, Thomas was running, things and he was one of those kind of believers. But I think that 1929 and what happened in the markets just got got so far away from them that they realized that there was nothing ultimately, in the end, they could do. And they didn't know that until it was too late.

So 1907, literally a hundred years before our crash. And then the, that the great financial crisis that leading to all of this overconfidence that there is just an endless series of tools that the government has to stop anything. And then we get to the ninth.

You're making your own paranoid sound. How do you not how do you how can you know what the brain does? And I don't even like I'm. I'm not even arguing. There's a parallel. I just think that the brain naturally sees these things and we can't avoid it.

And by the way, we're not 25, so we still have 44 years.

Now, this is not financial advice, but before here's I'm going to try and make my money. Wait, maybe this I'm going to ask you. So I don't know if there's you may not even want to answer. This could be like a really good movie or TV show on Netflix.

Oh, yeah. Yes.

I thought it's very gilded, very Gilded Age.

Yeah, I had that thought, too.

Or you can. Can you give us a little news here?

I don't have any news for you. You know, happy creator of Billions. Happily, there's a bunch of, folks in Hollywood who've been reaching out recently, and and there's some conversations going on, but.

Okay, no news.

And, I, you know, it's one of those crossed your fingers. Kind of.

We can officially say that we think it would be a good show. We want cameos.

Yeah, we want cameos. We can organize that.

True. This is a period piece, so we're going to have to I love it. Yeah.

Tracy could be the, the astrologer that hangs out at the Algonquin Livestock Tip Plaza Hotel. Tell us about that.

So you're talking about Evangeline Adams? Yeah, she was an astrologer. And an astrologer who was taken shockingly seriously at that time by all sorts of finance. Here's, before he died, J.P. Morgan himself was famous for going to visit with her. She had an office in Carnegie Hall, and she would literally sit inside the Plaza Hotel, and people would come up and talk to her and visit the chatter newsletter.

And she had and then and by the way, interestingly, in October of 1929, as the market is crashing and people don't always appreciate the crash really happened over several days, it was not just one bad day. She would have these almost like seances where people would come to her office and she wasn't doing one on ones at that point because it was the groups were so big.

She was summoning the animal spirits. Yes.

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

Yeah. There's another thing that you write about in your book, which, again, could be a potential parallel, which is, I guess, the role of technology back then. And I'm thinking about the recent banking crisis, mini drama, whatever you want to call it, where, you know, rumors about the health of the bank flew around really, really quickly. On social media and in private chat groups and things like that. And some people thought that contributed to a lot of the, the problems in the 1929 crash, how quickly did information disseminate and how quickly were the share price drops, actually, you know, reflected on the exchanges and communicated to other people glacially.

Glacially. So one of the big technological problems in 1929 was that the 'big board' at the New York Stock Exchange would often fall behind literally by hours. So you could be looking at the board thinking that you knew the score, what the price of the stock is. But it would literally be hours off. And that's if you're physically on the floor of the exchange.

The folks on the floor were then calling all the brokerage houses around the country and even uptown in New York, to tell them what the numbers were. And so their numbers were hopelessly out of date. And, you know, when you see pictures of, you know, thousands of people on the streets of Wall Street, those famous pictures in October of 1929, the reason there were so many people in the streets, people had gone down there physically because they wanted to see what was actually happening to their investments, because you couldn't call somebody. There was no app to look at. And that unto itself created a real dilemma.

Putting aside what was going on, by the way, on some of these, boats, you know, people were trading on boats. Those guys were, you know, half a day, a day, they're sending pigeon carriers pretty much only the stock price.

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

I was literally going to say, who was the Ken Griffin setting up a satellite in his dorm or any one of these people who later on try to get a faster line to the exchange with microwave towers? He did that with phone lines, he did with phone lines and his own people literally down on the floor, that within calling in the bids back to his office so that he would have better information than other people.

Phone lines were the Lindy latency of the time. Yeah.

They were. That's what I say.

Okay, another parallel. I'm just going to throw I love it. And you can agree or disagree with Andrew Ross Sorkin of the time.

Okay, there you go. Was there an Andrew Ross Sorkin of the time?

Well there was an Alexander Noyes was the business editor of The New York Times. And he was pretty respected guy. So I think that would have been. So that's I would I would take that.

All right.

There. Interestingly, there was a reporter on lots of the time, Walter Lippmann.

Oh, you know, so Walter loaded a Walter Lippmann.

So Walter Lippmann was a very interesting journalist because he was he was very inside. He had a very close relationship with Thomas Lamont at J.P. Morgan. Some people might have said back then afterwards to close, okay, that's not a he then turned around, though actually, after a lot of these things emerged and sort of really went after them. And so, I don't know, there's a, there was but the other thing I should say, we as a group, meaning the journal, the journalists did not cover ourselves in glory, in part because a lot of these people were being paid off physically, like with cash. I mean, talk about manipulation. There were no insider trading laws. Yeah. People were literally going up to reporters, forget about taking them as a dinner. They were saying, you know, here's money and please write an article saying such and such stock is, you know, bound to move higher tomorrow because some rumor.

Okay, so another parallel. Just keep going. People talk about AI nowadays and you see these charts of these sort of, I always say it's an incestuous relationship between all the different AI companies where so-and-so is buying from this company, and then they're lending to this company, and it all kind of comes full circle when you think about the 1929 crash, a lot of it was, you know, businesses issuing stock in order to borrow money in order to invest in more stocks. Any similarities there? That sort of self.

I think it's very popular dealing. Well, if you think about these investment trusts, there were so many investment trusts, it turned into sort of leverage upon leverage. They were like Russian dolls of leverage, and you didn't really even know what was inside of them.

I think that's a little I don't know if I can look at fully at the AI companies like that just yet, though. I think they're probably certain types of deals and vendor financing sort of, arrangements that should be raising questions. But you could look at the world of crypto, actually, you could look at, you know, strategy group. Is it interesting? I mean, is strategy is like an investment trust. That's actually what it is. A lot of these trusts that are emerging, that's what they are.

The question for the erstwhile MicroStrategy, just for yes, for people who haven't been paying attention to the name. Yeah, yeah.

Formerly MicroStrategy, Michael Saylor. And, you know, I think there are so there are these businesses that that have similarities. Again, I don't want to tell you that strategy. Sure is it is it is a 1929 style investment trust per se. I don't know.

Can we talk about some other stuff? What do you what's your. You said in the intro? Yeah. You're like, have all these affiliations. You're still doing dealbook all this other stuff, like, dude, we grew up together. We you're like, no, no, what is your what is your, like, what are you. Because you're still doing all of that. I've like pared back a bunch of stuff. I don't do TV anymore, etc.. Like, what is your, like day? When I used to wake up with you and I used to, but then I stuff. And because I got tired and you didn't. So what I want to know is like, tell me about what's a day like for you these days? What are you up to?

So I wake up usually around 430 ish. I usually do sort of the final pass on some dealbook stuff to call it 510 ish.

Do you just go straight to the computer?

Yes. Oh, straight. There's no there's no. Yes. No. The alarm goes off, up up, up. And then I do squawk box oftentimes still, fixing things until book up until the bitter end. And that usually goes to about nine often go on to morning Joe, maybe talk a little economics there and then get back into Dealbook land as we plan out the next day's newsletter and then in between all of that, try to write this. And, I have three kids and get involved in other projects and things. So it's it's a busy day that doesn't typically end to, you know, the end of the day.

What time do you go to bed?

I try to go to bed. I try by 930. If I if I can do it, that's really if I can be in bed by 930, this can work. Yeah. If it gets to 10 or 10, 15 or any time after that, there's going to be a rough day the next day. The next day is not a good day.

Okay. Well, one of the things you're known for is, you know, you have a lot of access, you know, a lot of people. What are you hearing right now? You don't have to name names, obviously, but what are you hearing? General opinions about the market and maybe the influence of policy from the Trump administration.

Oh, goodness. So I don't know any CEO right now that is particularly thrilled with the Trump administration per se. I think that most CEOs I know are quite troubled by things that the Trump administration is doing. You won't normally hear that, with the exception of maybe Ken Griffin or somebody like that who's been somewhat public about some things, but of course, sort of modulated on others.

Having said that, I think they love the idea of deregulation. I think the folks in finance, by the way, love the idea of some of the things that Trump is doing, even when it comes to things like, you know, earnings reports. You know, most CEOs I know say I don't want to have to do earnings, you know, four times a year. I'll do that twice. You have a whole movement afoot. And by the way, this is this to me is a parallel, you know, 1920s. We talked about democratizing finance. That was like a big concept. Now, this whole idea of democratizing finance in the context of putting private credit and private equity in venture capital inside your retirement accounts in these sort of semi liquid funds and things. That's very 1929 ish to me.

So I do think there are people who like that, but I think there's still this sort of sort of underlying agita.

Can you talk actually a little bit more about this shattered a nation part of it. Like what does it mean? I mean, there was a big downturn. We all know about the Great Depression. Did it threaten to rip apart the country when it all ended?

Well? So I think it ultimately did come close to ripping apart the country. But I think even, maybe more powerfully ripped apart generationally a psyche. So I don't tell the story in the book because I didn't know if it was appropriate. But I'll tell it to you. My grandfather was 11 years old. He's no longer alive. In 1929, he, his brother was a messenger boy, and he was down there in October of 1939. He used to tell the story, and he was helping his brother, and he watched somebody jump out of window, and he lived till he was 91 years old. And he never bought a share of stock in his entire life. Bought and bonds never stock. And he would always say, Andrew, this whole stock market thing. Yeah. Not for us. Too risky.

And so I when I say shattered the nation, I mean I think it did to some degree come close to shattering the psyche of a nation. Did it did it come close to a civil war? No. Yeah. But clearly the idea of unemployment being 25% in America, that there were shantytowns otherwise known as Hoover Villas, literally in Central Park, you know, just a couple blocks from here. And then, you know, worse in so many other places, I think for for a generation of people, it felt like a shattered nation.

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

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

Totally back to something you said before. It's interesting that these CEOs don't really speak their mind when the whole thing in January was like, finally free speech. We can talk again. We can we can say all the things that we've been hearing. It's kind of messed up, isn't it?

Look, you think that there should be real free speech taking place and that people can raise their hand? The liberal attitude towards speech. But I think right now the view is, what's the trade off? I think there are people who who don't who look at certain things happening in Washington, say, I don't like what's happening if I raise my hand now, if I raise my hand today, what is the upside for raising my hand? And what is the downside for raising my hand? I think they look and say there's very little upside, actually, because the chance of a real change in this moment right now is unlikely. Maybe when we get to an election or midterms or other things, I don't know.

And the chance of, you know, on the downside is high. I mean, I think that between what we've seen, the administration to the law firms, to universities, the whole Paramount CBS story taking stakes in Intel and other things, I mean, I think there's real implications. If you're a business leader today about how you approach your job, you know, every business leader is almost have to become a politician.

Yeah. All right. This is a very, journalistic classic cliche question. I feel kind of bad, but you're another journalist, so, you know, don't judge me. Know if you could, I guess, take away one lesson from the 1929 crash and really emphasize it to politicians, policymakers, regulators, businesspeople, whoever. What would it be?

Every financial crisis is a function of one thing. Is leverage in the system. Too much leverage. You actually can have speculators and all the bad actors you want, doing all the bad things you can imagine on stage, but it's the leverage that tips it over. And as a result, you need to have guardrails to prevent that because the human condition is to want more, right? That's what the investor class it's I hate to say the idea of self-regulation is very, very difficult. People do not regulate themselves. They just don't. And so we just need to be super careful, especially when there are all these kind of new products being developed and other things. We don't know where the leverage is. That to me would be the the single biggest thing.

And my fear is we're living in a moment right now actually, where some of those guardrails are almost purposely being taken away.

Well, we have four years between for until the 100 year anniversary of the 1929 crash. Andrew Ross Sorkin so thrilled to finally have you on the podcast. The book is a great opportunity. It's really great. I really appreciate it. Really cool that you did this. I'm very, everyone should be very impressed and everyone should check it out. It's great history and, I hope a I hope it becomes a TV show.

Thank you, I hope, I hope I can come back here in 2029, if you please.

For sure. And then 2030. Yeah.

All right. That was for. Thank you I appreciate it.

Thank you.

Thank you so much. Tracy, that was a lot of fun. I love bubble history. We used to do tons more episodes.

Oh, yeah. They're always really fun.

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

Yeah, we did. So a bunch of episodes on that, and, now this is really cool. I love all the pop culture elements, the Winston Churchill, the Groucho Marx astrologer. It's incredibly rich story. It's an incredibly rich piece of history.

Yeah. And it is funny. You can't avoid thinking about the parallels. You really can't.

When am I getting my Japanese exotic rabbit bubble episode? Is there any time? Was that a bubble? I didn't know about that one, apparently.

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

Let's do it. Let's do them all.

All right, here's the bat. The guano bubble. We've never done an episode on it, but, one thing.

The one other thing too, is I think, like, you know, 2007, 2008, the great financial crisis. That was like a debt bubble, right? There was a bunch of assets that were expected to pay back at a dollar on the dollar, and they like, paid back at $0.90 an hour. And the people panicked and it was abandoned.

There's still a lot of credit tied to it.

There was a lot of there was definitely the leverage. The debt was being used as collateral. The debt was being used as a collateral. But it was, you know, that right now we don't. It just feels like it's a stock story. It's a it's a, it's a things. Everyone wants access to the right tail. Yeah.

Whatever.

And everyone wants the big score, etc.. And that was sort of 1929. Reminds me of this idea. Like different than a sort of like housing bubble. Just this idea like everyone wants those right tail outcomes, including Winston Churchill and Roger Marx.

Well, you know, the chart that the Dumas always tweet is the margin debt chart, right? And, you know, I have doubts about that because the margin debt chart goes up when stocks go up. But it is at record highs. So anyway, people should definitely check out this book.

All right. Shall we leave it there?

Let's leave it there.

This has been another episode of the All Thoughts podcast. I'm Tracy Alloway, you can follow me at Tracy Alloway.

And I'm Joe Weisenthal. You can follow me at The stalwart. If you enjoyed this conversation then please like comment below or subscribe. Thanks for watching. And to.