Lloyd: So nobody can remember being friends with Russia now. But we were when I started. You couldn't think of going to Russia. I remember I once my early trips, I was in the commodities business, I started in the commodities business, and we used to go to Russia in the early 80s. We're like 1982 and 1983, middle of the Cold War. And I remember when the plane would take off and you wouldn't go directly to the plane, go in the air, and people start applauding. When the plane lifted off, you couldn't imagine Russia being normal, like a place to do business. Then in the Gogo years after the fall of the eye of the Iron Curtain, you'd go there and it was like the what? It was, it was it was capitalism on steroids. And we thought that that was going to endure. And now, you know, reverse again. Same thing with China when, you know, we invested a lot of time. I personally invested a lot of time and effort in you, by the way, we still have a big business in China, but it's, you know, as imagine strain. Now it's very hard to do business.

Joe: Music has kind of a Western vibe.

Lloyd: Yes, nice straight. It's very polarizing.

Joe: Oh, no. Love it.

Lloyd: Some people hate it.

Joe: Joe, I have a confession to make.

Lloyd: Yeah. Go on.

Joe: This is probably the most nervous I've ever been for.

Lloyd: And all thoughts of us.

Joe: Are you for real? Yeah. And I'll tell you why. And actually, the reason why. You'll know. Because you want to know.

Lloyd: I do know the first time Joe and I ever met Lloyd Blankfein in person was at a sort of media roundtable. And for some reason, I felt it incumbent upon myself to tell a joke.

Tracy: You were late, too.

Lloyd: Oh, I was. You came in late. All right. I forgot that part. I like that. I told the jokes to try to, you know, make it up, I guess. Probably the joke was at Goldman's expense. At which point Lloyd leaned forward on the table and he said, let me tell you how I would have made that joke funny. And the worst part was, he then made a very, very good joke that was a lot funnier than what I had. Just I think I said, you supposed that you should put the punchline at the end, not a beginning.

Joe: That's right. We we actually talked about what the joke was. The context of the joke is I remember it well.

Lloyd: Go on.

Joe: So, Tracy, so the whole reason that the, that the media roundtable happened was that apparently Lloyd was supposed to be in London for or sorry, in China for some reason. And something happened like, someone from the U.K. was there and Lloyd's schedule got changed. And so they at the last second, they're like, oh, maybe some reporters will bring in. And then the joke that Tracy made was something about having to like, oh, were you going to go there to recruit princelings for Goldman Sachs, which at the time was, you know, one of those scandals?

Lloyd: I swear it was better than that. That was the theme of the joke. It was it wasn't Goldman's expense.

Joe: All right. So we all learned our lesson, which is don't try to be funnier than Lloyd because he'll beat you at it every time. But, Lloyd, congratulations on the book. Well.

Lloyd: Thank you.

Joe: Very exciting to be speaking with you. One thing I learned from the book is that you're spending your time trading now. And when I read that, I sort of had a vision of you on your phone on Robinhood trading, like zero day options or something like that. What are you actually trading and where?

Lloyd: Well, I'm sort of committed to Goldman. I would be on Robin. That would be the history. Now, to me, that's, one of the occupational hazards of my, my prior life is that, I watch markets all the time. I watch markets at night while I'm asleep. And so I know the price of everything all the time, and I trade. But it's not like when you say I'm spending. You spend your time trading you. No, it's just background noise while I'm having a conversation in my, in my life with people like, you know, hanging around with sometimes in business. It is not considered to be rude that if you're talking to somebody, you're not looking at them, but looking at a screen or a phone or something like that, that, that, that, that's, that's kind of okay. So it's like I work with Joe. I know. So doing that when somebody says what percentage of your time you try and it's like listening to music, you can listen to music while you're doing something else. So you it adds up to more than 100%. What are you trade? No I'm not. We're not here for stock. Okay. But like, what's interesting markets and such that you feel compelled to click buttons and try to anticipate move.

Joe: Well that could.

Lloyd: Well, I was always kind of a I mean yeah came up through you know, what would we call you know, the macro markets, large things, interest rates, you know, government policy, you know, fiscal, you know, the, the sort of stuff that kind of moves all assets together, although there's always differences. So that's my background, but I, you know, so these things mean everybody now is in the is in tech. Because if you weren't in tech you'd be bankrupt because you'd be wrong for all this time. So everybody is, given how the markets have moved sort of consistently for a very long time. I tell you what, everybody is kind of in and of course, I can tell you who's getting hurt at any given part when it when it gets upset, for a day. But I mean, probably things that wouldn't surprise you, but. All right, maybe the biggest surprises. And I'm all in, you know, so, like, I'm always 100% in equities now. Wow.

Joe: Yeah. Risk assets.

Lloyd: That's you know that's what you say. Risk at risk assets. Right.

Joe: Yeah. Right. Risky assets.

Joe: Well so after you've retired from Goldman some people were surprised that you didn't choose to go into politics. Like it's going to be two years. Yeah. Well explain that. Like why why did you you took a proper break when you left Goldman.

Lloyd: Yeah.

Lloyd: Well, let me tell you, if somebody gave me something overwhelmingly interesting and fun, I might have done it. My last five predecessors, five of my last six predecessors, either went into the cabinet, except for Jon Corzine, became senator of New Jersey. But, you know, you know, Bob Rubin and, and Hank Paulson, Treasury secretaries and whatnot. I came out in the, I stopped in 2008 and end of 2000, in the second half of the, of the first of Trump one, the beginning of Trump won. You know, the economic team was Gary Cohn and Steven Mnuchin all ex Goldman. So I think I think we had had enough of that. And I certainly didn't want I didn't want to like add myself to the list at that point. And so I kind of drifted on that I drifted through Covid and I say, you know, I kind of like this, you know, not sending an alarm clock in the morning, Saturday afternoon, having lunch and not having to go to the airport on a Saturday afternoon so I could get to so I can get to Beijing first thing Monday morning. And so it's it's easy to get used to, sloth.

Joe: So here's the thing I get not taking some big job after retirement. Like I totally get that. I get wanting to trade. And that sounds like stimulating and intellectually, you know, interesting and fun and so forth. Here's what I don't get. Why don't you tweet more? And the reason I ask that is because, like, I'm addicted to posting and a lot of people in your shoes or at your level, I give you all this impulse to like, always weigh in on everything. And Twitter is a great did for a while, I know, but never that much. And what I want to know, it's like no, no, I was I was fighting with people. I was fighting with people that had subpoena power. Okay. So how do you resist the temptation to keep doing it? Because I would like to know how to post less.

Lloyd: Well, I'll tell you this. The urge to chime in on everything I was in the I was in the risk management business. And so the risk reward is certain things. So for example, you know, retired when you when, when things are going badly you quit. You can't leave my job and by the way, we had the crisis of the century every four years. And most of the time that accuse us of improper, you accuse us of causing it falsely. Of course, I did write a few of those. Yes. I'm not sure I pretend to have forgotten that. But when things are going well, you know, when things are going badly, you can't leave. When things are going well, you don't want to leave. Which is why, in my line of work, everybody leaves in distress. You know, you get fired or something comes over, the world blows up. You don't do well. You have, you know, you lose. Something happens. And I didn't do that. I left on my own steam. Yeah. And I quit tweeting. I still tweet very occasionally, but I mostly tweet quit tweeting before I got canceled, which is very unusual because most people quit after they most people, most people get quit. They don't quit on their own.

Joe: And you chalk that up to your natural risk management knowledge and intuitions. You're like, you know what? I'm just I'm not going to do it until the end when you you're not going to be being generous.

Lloyd: I chalk it up to my normal anxiety and my not wanting to, you know, get killed. So yeah, we're going to you might call, you know, just sensible, sensible sense sensibility. But really, most of that stuff and I always you know, because I was doing things on the line, I would fight with the, you know, was with Warren and, well, you know, largely because they would say something, you know, mostly I was responding, and I kind of liked it and that the problem is you get a good reaction some, you know, good reaction, and then you start to feel clever. Yes. And when you start to feel clever, that's when you're going to get killed, because then you think, gee, this is irresistible. And then somebody might say, well, you know, you're not going to like that. And I said, how can I resist? It's so clever. Yeah. And so I guess what I found, I found that I found that resistible. So I starts impressive.

Joe: Yeah. It just takes one bad tweet.

Lloyd: That's right.

Joe: So when I think about your career and, you know, I read the whole book, so I know your career trajectory fairly well at this point. I kind of think of it as synonymous with globalization. And, yeah, you know, you wrote the sort of wave of international expansion, and then you retired in 2018 and it turned out 2018, 2020 was sort of the end of that globalization era. You know, the world was a little less flat. Yeah. When when you look back on that time, do you think that was a blip? Was that an unusual circumstances?

Lloyd: You never know. When I start, you know, when it when sentiment changes, it changes your memory of what you used to think. It's kind of a weird thing. So nobody can remember being friends with Russia now. But we were when I started. You couldn't think of going to Russia. I remember I once my early trips, I was in the commodities business, I started in the commodities business, and we used to go to Russia in the early 80s. We're like 1982 and 1983, middle of the Cold War. And I remember when the plane would take off and you wouldn't go directly to the plane, go in the air, and people start applauding. When the plane lifted off, you couldn't imagine Russia being normal, like a place to do business. Then in the Gogo years after the fall of the eye of the Iron Curtain, you'd go there and it was like the what? It was, it was it was capitalism on steroids. And we thought that that was going to endure. And now, you know, reverse again. Same thing with China when, you know, we invested a lot of time. I personally invested a lot of time and effort in you, by the way, we still have a big business in China, but it's, you know, as imagine strain. Now it's very hard to do business. We had a lot of joint ventures that can't be done because it's Chinese. You know, it's too much of a Chinese association for it. But when I started, you couldn't have gone. Then for a long time, you thought we were growing into each other, that we were going. And then, you know, now we had a speed. But the point is, there are cycles to everything. It's not a question of something being boop. Everything is a blip and everything gets a little bit undone. I think I would have said, and I still believe, I think the tendency is for things to improve, to get better. You know what happened? You know, globalization, it's not just the rivalries or the polarization of the East and the West. I tell you, the global financial crisis contributed to that, because what happened was, you know, there was the central banks of the world and the governments of the world were coordinating their policies. And then when, and then when it hit the fan in a digital world where nothing really moves except electrons and digital notations, it suddenly became important to each government where a where UN institutions assets were, if the assets were in the United, the United States, U.S., the US central bank, the fed was lending money for example, to the US, the U.S. affiliate of Deutsche Bank, and they were lending to Deutsche Bank multiples of the assets that Deutsche Bank had subject to the US, because most of their assets were Germany. All of a sudden, people realized that and it became very 19th century. It became where are the assets like physically as if they were really physical assets as opposed to but assets have a location. And they discovered that similarly. And I mean, you can go to data point by data point Covid, it made a real difference who where they were manufacturing the vaccines. Yeah. Who got them first or the PPE and all this other stuff. And so now of course that was that's been, you know, emphasized now because now it's, you know, America first. And I'm sure you know, I don't speak German, but I'm sure in Germany it's Germany first and it's like that, but that also will evolve. And that's that cycle will go again because, you know, does the world it turns out when, when we started to globalize, say does Europe, does Europe need 14 battery makers? Shouldn't they just have three for the whole thing? And then it became very important that you had a battery maker for strategic in your own country, and supply chains and other things that make people less global.

Joe: When you think about that time, you know, there's incredible the fed opening up swap lines with central banks all around the world, banks getting support even if they're not necessary, primarily domiciled in the US. Do you think that that would even be possible today in the current media environment because it was controversial then?

Lloyd: It would be. It would be what was going on. First of all, you have to do what you have to do. So, you know, would you think it would be possible to in a, in a, in a, in an America first presidency, we were not going to go into wars. Is this possible. But of course, you know, he felt you know obviously felt there was some compulsion to do it. People disagree but that's certainly how he's representing it. So you do what you have to do. If we had a crisis like that, somebody, you would have to sort out the banking system. Now, you can you can want to, you know, bring them up and trial and kill them, you know, do whatever you want to it. But at the end of the day, governments don't lend money to people in central banks to lend money to people. The transmission for economic policy and for monetary policy and getting money out into the public is the banking system. And if the banks are distressed, if you gave them money, they husband that money to increase their reserves so they could be solvent. And in fact, they have to do that. And the regulation requires that they do that. And so it's very, very hard to get money and resources and get people going and provide that stimulus to the general public with a distressed banking system, which is why the the big recession was a big recession, because it was very hard to get over today if we had bad employment, if growth went down and we weren't particularly worried about inflation, it would be no problem to stimulate the economy to take rates down. Fiscal spending. The banks are in good shape. If the banks are in bad shape, that's very hard to do.

Joe: I mean, since we're talking sort of hypothetical crisis scenarios, one of the things we sometimes hear from people is because the US government is very polarized at the moment. Maybe some people would say it feels a little bit disorganized at times. If we had a financial crisis, the response would be a lot less direct or a lot less swift than what we saw in 2008 when we had ex Goldman. I it's like Hank Paulson at the helm. Or Geithner for that matter. What's your sense of how the current administration would react to something like, look,

Lloyd: I've said this and, you know, you don't you don't know, nobody knows anything. But my guess is they would be fleet of foot and they would do it because you have to do what you have to do. They would hate look, they would hate if that had to happen, hypothetically, they would hate it. They hated it in 2008. Really hated it. Really, really 15 more. Really hated it. But we will look, you know, staring at not so much staring at the abyss like it would have gone. But my guess and I, you know, everyone's always asking. I think there was like, you know, like a 15, 17, 15 to 20% chance that it could really have gone off the rails and that we really would have had a crisis. It would have taken a very long time. Because what happens is in a in a kind of crisis where there's credit, a credit crisis, which is what it was, a credit crisis. We owe each other money. There's a daisy chain of money. You bought something from him. He bought it from me. And that goes around in a credit. Well, you don't know the solvency of your counterpart. You're not going to pay me until I pay you. So you're waiting. But I can't pay him unless I get my money from you. So I'm stuck, and he's stuck, and he's stuck and he's stuck to the system is frozen. You need somebody with a big balance sheet. That's usually a government to say we will for this short term, cover it. So all of you will get paid. Now go in. Generally you don't have to use the money. The money comes back because it's just insecurity that drives that. And I think the government would have to do that. They'd hate it but would have to do that. And by the way, this is not going to happen again. You know, fortunately, you know, it was once an 80 year storm. But you know, I'm not I don't think I'm I'm going to see the next one. But, you know, it's these things, you know, when you get through a crisis like that, everyone says, let's ensure we never have another crisis again. And you know how you can do that. You can turn yourself into a Treasury bill. You can turn it. And even a Treasury bill has a risk because you're taking a risk with the value that the value of the dollar doesn't get inflated away, and it retains its purchasing power. If you take zero out risk, you will have zero progress and zero growth. And so what happens is and again, it's a cycle to things. You come out of that and you say never, never, never, never. You implement very, very tough protocols and regulations and things and over time you start to think, you know, it will be a lot growth here. If the if there was more growth here is a good word, there would be a lot growth here. Or wouldn't it be great if banks did mortgages again? Wouldn't it be great if you didn't have to put down 30% to get a and blah, blah blah? And it relaxes at time. Memories start to dim and it gets to a point and maybe it gets past the point where it should and the cycle resumes and you say, how could that have happened again so soon? It's only been 80 years, right?

Joe: So one area and you've commented on this a little bit in your, your little media tour over the last several days? Daniel. But, you know, we've had a lot of stress in private assets, private credit in particular, some of the big companies, having issues, all kinds of issues. It's one thing for it to be bad, and maybe it's one thing for people to lose money. Is there anything about the structure, though, that could get systemic where it becomes something beyond just investors lost money because they made bad?

Lloyd: I think, you know, talking about credit, I think the general issue is illiquid. Yeah, illiquid stuff can be private equity. And you know, like everything like everything else that balloons into a crisis. Of course I don't think it's going to be systemic. No one does. No one sort because of everyone thought it would be systemic. You know, we would have fixed it, but we'd have done something about it before it got to that point. You're always surprised, even the people who you think are in the inside who should know better. They're also surprised, too. I don't know, you know, these the private credit and other private assets. I think they're generally of course, by definition, they don't trade publicly. So they're less liquid and maybe even sometimes illiquid and consequently very hard to price. So when you have your asset and you look at your, you know, you look at your account and you own this and you get a mark to market, is it reliable? Is it where you can sell it? There are a lot of private assets on people's balance. You could take private equity. We've just gone through a period of time where we've had, record equity prices in a world that's awash with liquidity, the best financing market. And there's still an accumulation of assets on, on the balance sheet of companies that are in the business of selling and selling the assets they invest. And yet that hasn't happened. So maybe they're not marked for sale really to be done. So that's that could be an issue in general, I'd say one of the things now there's nothing wrong with private credit, private asset, private equity. As long as the returns, the expected returns compensate you for the liquidity and the people you're communicating to understand the illiquidity in the consequence of the illiquidity to then I'm not you know, that has to be made clear. I'm not always sure that it is. And certainly if it goes wrong, no one will remember having been told that. Right?

Lloyd: So I would say, and in taking account of that, I would say a particular private asset, whether it's credit or private equity, is no different in your hand, in an individual's hands or an institution hands. But the consequence of it going badly is much it's much more is much worse if it's individual hands. Why is that? Because I would say the official sector can watch institutions very high net worth individuals lose money and not be particularly perturbed about that. Yeah, but when it goes to consumers and retails other names for which are citizens and taxpayers and voters, yeah. The public, the official sector gets very perturbed. So one of my one of the comments I made is, without opining whether these are good or whether the marks are correct or whether the illiquidity premium you're getting is adequate or not, I just said, you know, be careful. Some of these firms, people who run these firms have fabulous lives, do very well for a long time, have boats and everything, and great. Had multiple houses, have some trepidation about extending your business from institutions into four. One case people. It's people who are less than people who are less than the highest net worth individuals. And by the way, adjacent insurance companies, which is sort of one order away from individuals because insurance companies insure real people and need to be solvent. So that's something that I'd say is happening, too. It's not just the nature of the assets, but where some of these assets are being put now.

Joe: So I take the point about retail investors and private credit, but just putting your old Goldman Sachs CEO hat on again, I mean, one of the things Goldman was famous for was its very dynamic risk management at the time. And so I'm very curious, walk us through in excruciating detail how you, as CEO of Goldman Sachs would be managing private credit risk at the moment on a day to day basis for something that you know might be marked to market, could mean risk that we had what's on their balance sheet. Yes. Like what we know that we have a lot of risk management. We have a lot of risk in the in the financial crisis, everyone's focused on mortgages. Some of the biggest risks that we had were just loan commitments to come in a we have a very big we're the biggest M&A house. So we have a very big M&A franchise, which means that if you do an M&A deal, you commit to the financing. So we had a lot of financing commitments outstanding. That was that was sort of eye opening at the time, because we had commitments to make loans, at which, believe me at the time, you know, when things are going crazy, it's the last thing you want to do is do that. So we had to manage those risks.

Lloyd: So, you know, what do we do? We make sure in the lead up to the press, you know, once something is happening, you know, it's pretty late to start doing stuff when everybody's trying to get out of the same stuff. We always we sort of always knew we, we had a, we had a, you know, a real abiding respect for reality. So we would always try to make stuff to market. And very assiduously, we had a separate group, half the firm would take risk and the half would mark would do the marks, and sometimes the risk takers would disagree and say, oh, that Mark is too conservative. I think there's assets worth more. And we'd say, fine, I'm sure you're right. Go sell something that your mark is better than their market, that it's worth more. We would do that religious. I mean we were firm on that. And then when things started to get bad, when people couldn't sell things for where they thought it was, we started marking it lower. And when that started to happen, we didn't necessarily think we have a view what was going to happen. We went into risk management mode, so it didn't matter whether it was bullish or bearish. Stuff is happening and so we just put out the word stay close to home. So we have to take risk. People come to us to buy from them what they want to sell to sell to them what they want to buy. We get caught in risk taking situations from our general activities for our clients, but whenever we were veering too much in one direction, getting too long and getting too short, we would stop until there was another side to it and we would source the other side. So I mean, the key for us was not reacting crazily when, when the when it started to go badly. But what we did in the lead up, the other thing we did when we couldn't get other sides to things, we bought insurance in the market, previously from famously from other banks for very little because it was worth very look, we bought insurance on companies that weren't turned out not to be AA. We didn't do that because they thought that these really aren't Triple-A companies. Oh no, we thought they were Triple-A companies, but we just didn't want to have too much exposure to anything at that point. And the good thing about the fact that it doesn't, you know, it doesn't look like you need the insurance is that the people who sell you the insurance don't charge you very much because they think it's free money. And by the way, we thought we were wasting money and it turned out not. But that's just a discipline that you have to have all the time. You can't have that discipline when it looks like things are going bad. You have to have those that discipline. When things are looking good. Right?

Joe: That makes a lot of sense. New York City, how are you feeling in New York City, the center of the finance world today? The same way it was 15, 30 years ago? And is is that at risk?

Lloyd: Look, New York City is still where people come. Young people come especially to to learn what you can learn from your colleagues and to get around to being surrounded by a good culture and a good place. And I think that's why, you know, that's why I love the book. And I thought it was a brilliant book, but I thought it was wrong. The world is flat. Know you can be stimulated by something that's not right. The fact of the matter is, you know, you could be hooked up and, you know, and and, you know, and be living in Warsaw, which, by the way, is a financial community. And then and there's a lot of tech people in and, in Warsaw, but people who are smart and ambitious want to be around other people with smart in that change. You know, I'd say there are more pods than they were before. So I think there's communities in San, obviously in San Francisco, which is a tech community. A sub tech community is Boston, which has biotech. And so there are other places that that grow. But I still think the highest concentration is still New York. People are promoting Miami. Yeah, that and there's a lot of, you know, a lot of reasons for it. Like you got to keep more of your money because there's no state tax expensive place to live. New York, by the way, very expensive place to die. I don't know why I'm thinking those dark thoughts now, but, because New York has an estate, has an estate tax, and even California doesn't. But so for tax reasons and for reasons of, sunshine, people going there. But it's not New York. It's still in New York, you know, kind of, you know. Yeah.

Joe: On the Miami thing, I like Miami, but like.

Lloyd: But you're still like, why aren't you there? You don't spend 183 days of the year.

Joe: I am still for tax purposes. Taxpayer. Yeah. Why? Stupid.

Lloyd: No, I do it in New York City is the greatest I have. You know, my wife, you know, we have kids and we have grandkids. I tell my wife from time to time, if you really loved your kids and your grandkids, you move to Florida. You know, and, Wait, I just said no. Yeah, yeah. But, you know, we like being around a family. We have, plenty of money. I, and, you know, my, you know, my wife, I don't know how things run in your household, but, you know, I would say that, she has full voting control, and I'm not going to say anything holding that comment right now.

Joe: So I just want to go back to risk for a second. So, you know, in your book, you talk a little bit about private credit, but the one risk you highlight as the sort of big one that worries you, the most is some sort of technological risk, like, oh no, I said, yeah, you know, have said the world is going to end in a whimper, not a bang. Yeah. You know, everybody's talking about malevolent state agents. You know, taking it down every time we lost stuff and we had some wonderful problems in technology. I mean, they were all every once in a while there was some bad behavior. And somebody hid something for a while. But most of the time it was a fat finger. Like I remember one famous incident where somebody now, why anybody would do this, but they were they were testing some software. And in the software they were, you know, it just said they I remember this like somehow they were selling or somehow it got turned on and it sold all stocks that started with an L, m, N, O or P for a dollar.

Lloyd: Now, if you want to test something, why wouldn't you sell sell it for $1 million that somebody had suffered dollars and that thing was working for about 15 seconds and did about $2 billion, you know, billion dollars and a half dollars worth of transactions, which you managed to get undone. Mostly. Yes. You know, fat finger. What's a fat finger? That's when you hit the wrong key. And somebody was like, stupid. Somebody put in and, do it. The problem with technology is you have to chip, you know, you want to check things over and over again. But if you build in nine checks, nobody takes it seriously because they know eight other people are going to check it. It doesn't even solve the problem to build in more layers of checking, because it's mind numbing to check something, which is not a problem except once every two years. Who's going to let who's going to sleep through that know the world? I said, the world is getting dangerous in a way. When I started out in a trading room, everyone was said out loud. Somebody would say buy and you know, people. And it was all noise. Today you go into a trading room and you're communicating digitally with the person sitting next to you. In the old days, you chat across the room and if somebody said something wrong, a buy instead of a sell or the wrong number or the wrong price, the whole room would stop and everybody would look at that person. You would hear it. Now nobody hears anything. And if they did, they wouldn't know, because no one can intuit anything. Because took a lot of algorithms and a lot of technology trading. So I would say with technology, technology is leverage, and leverage is good when it's going the right way and leverage is bad when it's going the wrong way. And by the way, that's in life, in you. If you had an injustice, you know, prior to the age we're in today, where, you know, where the nuclear age, where, where proliferating and more atomic power and things like that, even for good uses. What could an industrial accident be? And if you think the biggest industrial accident was Bhopal Union Carbide, 8 or 9000 very tragic, horrible situation. Liability for Union Carbide destroyed the company. But I think 8 or 9000 people died in Fukushima, the Japanese, when they had the tsunami and in second place, the wind had been going a different direction. You would have had millions of people die. That's technology in progress for you. So not only is there leverage, the ability to intuit and see what the problem is, is less so I just postulated that, you know, we have all these safeguards, all these things, all these state actors. Malevolently trying to kill us. Yes. But you know something? I'm also worried about the mistake, the fact thing or the unintentional thing, because when not, how do you build it? It's hard to build in safeguards because the more safeguards in that you build, the more repose and relaxed you get about each one of them. And you know, but you find out that no one's doing that, no one's doing their job.

Joe: I mean, it seems inevitable to me now that AI is going to become more and more of banks, risk management or back office systems. Would you like what parts of a bank would you feel comfortable outsourcing?

Lloyd: Oh, everything. Everything shy of the job I had.

Joe: Okay. Go on.

Lloyd: You know, we don't know. I mean, the greatest technologists today aren't sure themselves where it'll go, but I think you're going to look, if you think about it, our brains, you know, your brain, you know, brains are all. We're just wiring. We're just. We're just code. We're a lot of light. We're a lot of a lot of lines of code. But we just code. And at some point you cross into judgment and reasoning and I'm sure will happen. I'm sure it's a lot. I'm sure. I'm sure my, the people who, at least until they start to walk better than they walk today, the people who garden for me and and the massage therapists and the personal trainers are safe. Well, maybe not even personal trainers, but everything shy of that is just some, you know, and then we're going to just have to. And then there'll be more jobs that leverage whatever stage of progress we're at. You know, once upon a time, not that long ago, beginning of the 20th century, more than half the country was involved in agriculture. Guess what? We absorbed those people. But it's not without stresses and strains. Not everybody who's, you know, work. Not everybody who's a software programmer is going to become a, you know, he's going to you know, it's going to be a Pilates teacher, right. And so there'll be some stress and dislocation. But who knows, with society is going to evolve, maybe, you know, and, you know, from school you read the Marxist ideal who everybody's gonna only have to work four days a week. Marxist ideology. And who knows, maybe they'll be. Once upon a time, there was a six day workweek. Even on Wall Street. People came in and said that's when they did the. That's when they did all the back office stuff. And maybe we go to a three day workweek. Maybe we worked once upon a time. It was a 10 to 10 hour workday. Now it's an eight hour workday. Maybe it goes to five. Maybe everybody just works less and moans to high heaven that they have to work for hours that day. So I'm not, you know, by the way, it doesn't matter whether we like it or not, it's going to happen. So we could spend a lot of time mourning for it and regretting it, but it's going to happen. But the idea that machines are going to do a lot of stuff that we do. When I started, when I started on Wall Street, I, you know, the tape people don't know, you know, ticker tape. What is that ticker tape? Those were the threads that came out. Well, once upon a time, that's how you communicated. You communicate tickers and you couldn't get it back. They had proofread it very carefully. Yeah. And you had to make sure that the confirmation you were sending to the central Bank of China, Beijing didn't go to the central Bank of China. Taiwan. Right. So I spent three hours a day doing that. Nobody spends any time doing that. Yeah. When I practice law, you used to have to go and look at every case that ever mentioned a case you relied on, lest it be have been overruled or criticized. I spent days doing that. No one spends minutes doing that today. That's progress. It's going to happen. And I welcome it, particularly since I've already made my money and I'm unemployed.

Joe: Let's be nice, Joe. When I first joined Bloomberg, one of my key duties was to monitor the fax machine just in case the Bank of Japan sent the facts over. Do they still, they do. They communicate with. I believe it's been automated. Now.

Joe: One of the versions of the future that people talk about is that, okay, AI is going to come. Bunch of white collar jobs are going to be eliminated, and there's going to be some sort of like universal basic income redistribution so that people can survive. But in theory, like that would require some taxation. And the fewer the handful of winter, the handful of winners of the AI world like they'd have to find some way to tax their wealth. Perhaps.

Joe: But this because I'm really interested in taxation. Because, like I pay a good chunk of my salary disappears in taxes. We had a good year last year, so we got bonuses recently. A good chunk immediately disappeared. I'm not going to like.

Lloyd: So now you're not a social Democrat?

Joe: No no no I'm fine. It's like, not the end of the world. I don't love it. But it's not the end of the world. It's hard for me to wrap my head around people who have all the money in the world and still optimize their lives about going to the lowest marginal tax jurisdiction. Can you help? No. It's clear you haven't done no, I haven't.

Lloyd: You're still in Europe. What can you crazy. But I'll just say that's why they have that a lot of money to begin with. Because that's what I guess that's how they do it. Because that's the only thing, and also the competitive, fiercely competitive. And they just want to win. I mean, actually, it's good in a way. I'm glad that the Mark Zuckerberg's name, I'm like or dislike these names of people, but the fact is, well, Elon Musk, they're on the cutting edge and they're still motivated to work. Thank goodness. I'm glad that I'm glad they're ours. I'm glad they work. But to just extrapolate the point you're making, the an economic system has to do a couple of things, and it has to do a lot of things. The two major things. It has to create wealth, and then it has to allocate that wealth, create that's created according to the values of society. I think our cap, our system has done a pretty good job in creating wealth. Nobody can get out there and figure out what the new thing is, and nobody's more ruthless about taking things that fail, or getting rid of them and repurposing them and and getting them off the balance sheet and building, you know, plowing over that airport that no one lands at and making a turning it into a Walmart. Nobody's better at doing that. But where we have done poorly is the allocation of it, the allocation of the proceeds. And that's, of course, where a lot of the polarization that we're living through now and, you know, so a variety of things, you know, you have to you know, obviously progressive taxation is one of them just building the safety net. So things are free and available to everything that previously you would have had to pay for. So, public housing has air conditioning now. Public housing when I grew up didn't have air conditioning. So making life better at a base minimum. But that's the test that, and that's the challenge that we have to do to allocate based upon values in a way that doesn't disincentivize people from working.

Lloyd: So at some level of taxation, you may be disincentivize from working poor Elon Musk went back to his shareholders and said, you know, I'm only worth $500 billion because you took away, you took away my options from the Tesla thing. Give them back or else I'm not going to work for Tesla anymore. So there. And so he got it back. And so now he's got that extra stimulus of billions 501 to 749. So you know you know people do what they do. But by the way I'm glad he's working. I'm glad he's one of mine. And I still can't believe those rocket ships can land in tandem so beautifully. And nobody else seems to be able to do it, so Bravo! Keep on going. I'll give you an extra couple of dollars if it'll help you.

Joe: You know, we started this conversation talking about how your career trajectory kind of mirrored the rise of globalization. But the other thing that mirrored was the rise of trading and sick in On Wall Street. I'm curious if you have any sense nowadays what the next sort of booming business is going to be among investment banks is everything kind of feels the same. Everything kind of feels flat, like, is there something that's going to take no,

Lloyd: It's not right. It's not the same, but it rhymes. You know, it doesn't repeat, but it rhymes. You know, really the last generation, the, you know, the cool kids in town where, you know, private equity and eternity is feels a little less cool the last couple of days, you know, you know, it shifts, but you know, there's always, you know, we're always wringing out efficiencies of things and we're always figuring out, you know, risk versus reward. And so illiquid stuff look better than public market stuff. Then you have a liquidity event where people try to sell and they get gated and it's not working out so well. And so that goes I, I don't know, I think, you know, the one of the things that I can't really do is they can't take risk. They can tell you, in my opinion, based upon my, you know, working this algorithm against this huge database, how those dice would have rolled and what, you know, what percentages, when you will do these simulations and stuff. But at the end of the day, you know, you have to still apply judgment. And if we were sitting there having a conversation 100 years ago, by the way, people a hundred years from now are going to be around, I don't know if they'll be sitting on this chair or floating, above ground, but they're going to be talking about how primitive we were thinking. Yeah, we're, you know, we're thinking sitting here thinking how cool we are today and how everything's up to date in Kansas City and everything is good and and novel, but all this is going to look stupid. Could you imagine? They carry their cell phones? Ha ha ha ha. What could you imagine? Yeah, I mean, this stuff, but but some things, as general principles are we are going to persist. I think they'll be create, create, you know, still people are going to still write music and naturally, you know, people will fill in the gaps. If you plug in a song, it'll it'll it'll publish another song like that. But will it do something radically innovative? I don't know, it's possible. Again, brains or lines of code. Maybe they'll just have more lines of code and eventually do it. But I do think certain things like willingness to take risk, judgment. I'm known so many brilliant people and I've known so many people with good judgment. It's amazing how infrequently those those come together at the same person at the same time within a given bank, you know, the the push pull or the tug between, okay, now bank banking and dealmaking is hot or trading is hard and it seems to go back and forth like is there a direction at Goldman or any other bank with the the next leader is going to come from could have come from the technology side. You know.

Lloyd: Yes. Well, first of all, it already has in a firm like Goldman, I bet over a third of the population of the firm are engineers. It was when I was there. I wouldn't have gotten it, would it wouldn't have gotten less than a short in this chair to anything. It would have gone more in that direction. So it already is engineering efficiency. Look, we're in a world now where in trading and market making, a lot of which is done algorithmically by machines, it's a millisecond game. If you have your computers a half a block closer to the main, to the to the main computers of the of the platform, you win everything because even moving at the speed of light, getting there ahead, it is so that's already been that's already, you know, that's already been done. But in a firm answer maybe, maybe I'm interpreting your question a little bit differently. These things happen at different times. So sometimes it's the people put deals together. Sometimes it's people finance deals. Sometimes the biggest, coolest kids on the block are the risk managers who prevent the firm from discombobulation and manage risk so successfully, so the other people can do their jobs in our organization.

Lloyd: One of the things that I think has helped Goldman Sachs be the agent is that we still the firms still run like it's 26 years since it was a private partnership. Half of my tenure was as a private in a private partnership, was in a company. But we ran the firm as a partnership. Everybody in the firm got paid largely on based on the how the firm as a whole did, not just a narrow area people, people, who did a good job and it wasn't their turn or the market was working a way that they couldn't make money, got compensated well for doing a good job even if the opportunity wasn't there, and if it was an easy market to make money in, and they weren't doing a good job and didn't do well, didn't matter that they did well, you know, in other words, we looked at the firm as a whole. People had to look out for each other. And it was place was run as a partnership. That's very helpful if you have a firm full of people who are owners, everyone is looking around what the people next to them are doing and if they see bad behavior or something's not right, they demand information about the whole firm, not just a narrow area, and they give you opinions even when you don't want to hear it. And so and guess what? It's a little bit slower and harder to run that organization. But I think you get a better you get a better outcome.

Joe: Now that the book is officially published, it's been a whole 18 hours, I suppose, since it's been published. But is there anything with the benefit of, of that 18 hours of daylight and reminiscence, that you wish you had included in the book and that you left out? I want to really know.

Lloyd: People are always telling me, I told, you know, we had you know, Bloomberg was very nice enough. Mike Bloomberg, the man. Not necessarily. The company hosted an event last night, and I thought of a Bloomberg. There was a story that I told that at the end of it, I could tell you the story, but please. Okay.

Lloyd: When I first got a, you know, and I first a million years ago, when the first Bloomberg terminals came out and I was a fairly junior person, and there was they put a Bloomberg Turbo in front of me that about 900 people was supposed to share, but it was right in front of me and everybody was walking by it like they were walking. You remember the movie 2001 A Space Odyssey? Remember the obelisk, the obelisk, and everyone's doing this and everybody was doing that, and I finally figured out how to use it. I put yellow paste ins on it with my schedule and numbers that I had to look out for. In other words, I couldn't turn. I didn't know how to turn on the machine, but I was using it as a as a bulletin board. And then somebody calls up and said, Lloyd found blind so-and-so. Who is it? Bloomberg. So I said, I'll call him back. I said, no, no, it's Bloomberg the person, not Bloomberg, the company. And it was Michael Bloomberg. And he calls me and he called up and I get on the phone and he said, I noticed you. We noticed you haven't turned on your machine. And I said, oh my God, where's the camera now? I said, well, we can tell you a little surveillance video. Yeah, we started it. And I said, and I said, go. And so you're calling me? And he goes, oh no, we do it the way here. And I don't know if they do it today. But in early Bloomberg, he had all the senior people in the organization every day. They had to call five customers each one and call them and discuss. And they said, I said, you know, I wow, I promise I'll turn on machine. And probably about two years later I figured out how to do it. But I'll turn on the machine. But I said, isn't that a very, inefficient use of your time? Because here you are calling me, and I wasn't a senior. And you guys and you guys now know we learn a lot about the business. I realize now that was a very stupid comment because here I am. First of all, everybody on our floor knew that my kid called and that he cared. The guy whose name was on the door cared about whether we using or not, and not only laterally across that dimension, everybody knew. But here I am 35 years later, telling the story and so now you're hearing about it. That was a very good use of three minutes of Michael Bloomberg that I'm telling that story of that, that his care and, and and so to me, I know how Bloomberg got built. And so that was the lesson I learned. So I told that story. And then I said, you know, Mike, this book is so good and has so many good stories that that one didn't even make it in the book. It's on the cutting room floor. If it sells well, maybe volume two or volume three.

Joe: Well, we went a couple of minutes over, but that was a it was it was a good story. That was a good ad for both the book and for Bloomberg. And I don't care. I know my audience. Lloyd Blankfein, thank you so much.

Lloyd: Thank you very much.