Pod Insights Odd Lots Andrew Ross Sorkin on the Stock Market Crash That Shattered America About this episode Almost everyone is talking about us possibly being in a bubble. Regardless of how AI investment ultimately pan out, there is an incredible amount of retail speculative mania in the air. So, how does this environment compare to past periods of exuberance? On this episode, we speak with Andrew Ross Sorkin, the editor of Dealbook, the co-host of CNBC's Squawk Box, and the author of the new book 1929: Inside the Greatest Crash in Wall Street History--and How It Shattered a Nation. Sorkin, who previously wrote Too Big to Fail (chronicling the Great Financial Crisis of 2008), went into the archives to discover just how in thrall the American public was to the market on the eve of the great crash. We discuss lessons from the time, similarities, and differences. Read more:Companies Overpaying for AI Add to Bubble Risks, Survey ShowsWhy Circular AI Deals Among OpenAI, Nvidia, AMD Are Raising Eyebrows Only http://Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Tracy Alloway? There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets fast. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.
0:26 Speaker 01 This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting
1:08 Speaker 01 and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.
1:49 Tracy Alloway? Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com/business. Chase for Business: Make More of What's Yours. The Chase mobile app is available for select mobile devices.
2:16 Speaker 02 If you listen to financial news, you know, a lot of time is spent thinking about what's next, the next opportunity, the next investment, the next move. But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables, and more. Because planning for the future isn't only about knowing what's next, it's about making sure you're ready for what you can't predict. Let Cincinnati Insurance make your bad day
2:58 Speaker 02 better. Find an independent agent at C I N F I N dot com.
3:06 Speaker 02 Bloomberg Audio Studios, podcasts, radio, news.
3:22 Joe Weisenthal? Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.
3:26 Tracy Alloway? And I'm Tracy Alloway.
3:27 Joe Weisenthal? Tracy, it's been a theme in a lot of our episodes lately, but we are in an age where trading and speculation, it's just part of the culture. We know that stocks are up. We know that a lot of things are up, but that's different than it being part of pop culture, which it is now.
3:41 Tracy Alloway? It's a culture of lines, lines going up. People watch the lines.
3:45 Joe Weisenthal? I really think that if you're walking down the street or on the subway and you see like a guy staring down at his phone, there's a good chance that he's like looking at a Bitcoin chart.
3:53 Tracy Alloway? A Bitcoin chart, yeah.
3:54 Joe Weisenthal? At any given moment.
3:55 Tracy Alloway? Well, this was one of the things about Bitcoin. It was so volatile. There was actually something to watch. There's like an entertainment factor. But of course, when you get this kind of speculative activity, everyone starts worrying about when's it gonna end, when's the crash.
4:10 Joe Weisenthal? I have this theory that nobody likes bubbles and that basically if there is a bubble, there's two camps of people. One camp that is really upset that they're missing out on it, and one camp that is really anxious that they're going to miss the top and that there are actually very few people in the camp where it's like. Oh, this is like really good. I'm really happy. I'm really relaxed.
4:28 Tracy Alloway? The people who nail the timing are pretty pleased with themselves, I assume.
4:32 Joe Weisenthal? And there's like five of those people, you know, like that's the problem. Afterwards, somebody's like, oh, I sold the top. I feel good.
4:37 Tracy Alloway? Yeah, absolutely. Okay, so famous crashes.
4:40 Joe Weisenthal? Famous crashes.
4:41 Tracy Alloway? We're gonna talk about one of them.
4:42 Joe Weisenthal? You know, I remember the dot com era very well. I don't remember the market environment we're gonna talk about.
4:48 Tracy Alloway? The 1920s?
4:49 Joe Weisenthal? No.
4:49 Tracy Alloway? You have no memory of that? Shame on you.
4:51 Joe Weisenthal? I don't remember 1929 very well. I did read John Kenneth Galbraith's famous book, The Great Crash. But there's a new book out on the great stock market boom and then crash of 1929. We are gonna be speaking with the author, someone I'm thrilled to talk to, someone whose accomplishments and work ethic puts us all to shame. We're gonna be speaking with the one and only Andrew Ross Sorkin, founder of Dealbook at New York Times, co-creator of Billions, co-host of some Squawk Box, CNBC. I made that joke when we had Jim Cramer on, as if I'd never heard the network. And now the author of 1929, Inside the Greatest Crash in History and How It Shattered a Nation. Andrew, thank you so much for coming on Odd Lots. Thrilled to have you here.
5:32 Speaker 04 Thank you for having me. I feel like I'm a longtime listener, first time caller.
5:36 Joe Weisenthal? Amazing.
5:37 Tracy Alloway? Thank you.
5:37 Joe Weisenthal? So this isn't the first time 1929 has been written about in the Galbraith book. It's probably like, that was up until now, probably the most famous book, right?
5:46 Speaker 04 That was a great book, yeah.
5:46 Joe Weisenthal? What was the impulse to go back and write a book about this, this period of time?
5:51 Speaker 04 To be honest with you, it was about 10 years ago. I had written Too Big to Fail. People used to ask me, because I'd written about the financial crisis of 2008, they'd ask me questions about 1929. And the truth was, I didn't really have answers. Because I sort of knew, I think like most of the public today, that something pretty bad happened. Then I had, I had read the Galbraith book. But sort of beyond that, I was lacking details. And I honestly, I went on a vacation. It was like a nerdy vacation thing to do. I downloaded some books to Kindle and I brought some more with me, all about 1929. I sort of pored through them. And I thought to myself,
6:31 Speaker 04 Why can't I understand who the characters are, like the people at a visceral level? Like, what were they saying to each other? What were their motivations? What were their incentives? Who was sleeping with who? What was really happening here? And, you know, I grew up sort of loving books like that were written by Michael Lewis or Jim Stewart with Den of Thieves.
6:53 Tracy Alloway? You mentioned A Night to Remember.
6:55 Speaker 04 Well, A Night to Remember with the Titanic was a great example of a book that really sort of made things feel human.
7:01 Tracy Alloway? Right.
7:02 Speaker 04 And so I thought, you know what? Could somebody, and maybe it was me, do that in 1929? And the truth was, I wasn't sure I could. One of the reasons I think this took so long was the entire time I wasn't sure. And when I first started it, actually, I mean, started doing the research, many of the archivists that I went to visit with were like, Andrew, we've read Too Big to Fail. That kind of granular detail, it's just too hard to find. And by the way, all the people are dead, obviously, so there's nobody to interview. You're really reliant on letters and notes and memos and transcripts. And the truth is, there wasn't like two or three or four major archives you could sort of go excavate. And so this turned into this sort of bizarre, years-long project of putting these puzzle
7:47 Speaker 04 pieces together.
7:48 Tracy Alloway? I can only imagine how much archival research you had to do for this book. It is very filled with texture and personality and lots and lots of details. Is there a particular character that kind of stuck out to you in this book? I've read about Charles Mitchell. He's sort of the villain, but then towards the end of it, you have a sort of more nuanced opinion.
8:12 Speaker 04 So I think there's a couple of characters. And the truth is, I would also say one other thing, because I know we'll probably end up talking about today, like modern day today. When I started writing this book, I never even thought about today. I was thinking really about then. I didn't think I was.
8:26 Joe Weisenthal? Because if this is the top this year, you nailed the timing. But anyway, keep going.
8:30 Speaker 04 So, but as I was working on this, these characters, to me, like Charlie Mitchell, who ran a bank called National City, which becomes Citigroup. Parallels to me between him, he effectively invented sort of modern credit for lending, if you will, to individuals to go and buy stock. I mean, to me, back then, he would have been as famous as a Jamie Dimon of today. He might have been the Michael Milken of his time in certain ways. He might have been even like a Dick Fold kind of character from Lehman Brothers. 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.
9:13 Speaker 04 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 Raskov, who to me is like Elon Musk in the 1920s. He was everywhere, all the time, philosopher king, helped run General Motors, really created credit at General Motors, which really changed America. That's actually when people started taking on credit for the first time. Goes on to play the market, goes on to get involved in politics. He actually tried to undermine Hoover's reputation in sort of a musky kind of way, if you will, and then goes to build what was then the equivalent of a spaceship in
9:58 Speaker 04 the Empire State Building. And meanwhile, I don't know if he gets credit for it, but he really did to some degree come up with the idea at least, or became an advocate for a five-day work week in America. People forget there were six days back then, and he thought it was an economic boon because people would have-
10:16 Tracy Alloway? Go and spend your money.
10:17 Speaker 04 They'll go spend money, they'll buy cars, they'll have to go play, they'll have time to go places, do all sorts. So I thought he was fascinating. And then the last person, Carter Glass. Carter Glass to me-
10:26 Tracy Alloway? Of Glass-Steagall fame.
10:27 Speaker 04 Of Glass-Steagall fame. He was a senator in Virginia. By the way, helped create the bill that led to the creation of the Federal Reserve. But he was the Elizabeth Warren of his time. And he used to rail for years about this thing called Mitchellism, and this idea that Charlie Mitchell and the creation of debt and leverage in the system was what was gonna undo it.
10:48 Joe Weisenthal? The Galbraith book talks a lot about the, I guess, what were they, before mutual funds, what were they called, the trusts?
10:54 Speaker 04 Investment trusts.
10:55 Joe Weisenthal? The investment trusts. But your book talks a lot about this idea of like retail leverage, basically, which is what you described. And you talk about they would say, okay, we've taught people that they can buy a car on margin, or a car on credit, or a dishwasher. Why not a stock? And it seems like they really trance, a lot of people in industry really sort of transported this consumer notion that was nascent and just like, yeah, let's port it over.
11:19 Speaker 04 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 today.
11:26 Joe Weisenthal? I bet it was really fun. I always think about these physical, or like the brokerage on a cruise. It's like, wouldn't it be fun to just walk in and play the market?
11:33 Tracy Alloway? You mentioned lounges in like hotels, women only, stock trading lounges, which, you know, I would go for those nowadays. They don't have to be women only, but just a place where you could watch the charts.
11:43 Speaker 04 The other thing that was nuts, though, is you would show up and you could give them a dollar and they would literally lend you 10. I mean, that's what we're talking about here. 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.
12:04 Tracy Alloway? 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.
12:25 Speaker 04 I think that's very true. I would actually specifically point actually to a technology story back then, which was
12:32 Joe Weisenthal? Radio.
12:33 Speaker 04 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, it was like $3. So.
13:04 Joe Weisenthal? So one thing I was, you know, obviously, when radio comes RCA, you're like, oh, it's the Nvidia of the time. Nvidia makes a ton of money and it makes more money every year. We 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.
13:21 Speaker 04 Vendor financing.
13:22 Joe Weisenthal? Was RCA making a ton of money or was it mostly excitement about the future? Do we have radios, financials from the 20s?
13:30 Speaker 04 So the bad news is we don't. In fact, somebody said to me the other day, did you ever get a chance to look at the prospectuses of these stocks? And I said, prospectuses? They hardly had leaflets. I mean, and that's if they had anything, they literally would be leaflets that they would hand you.
13:46 Joe Weisenthal? We don't know their P E ratios going, the P.
13:48 Speaker 04 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.
14:01 Tracy Alloway? So would you just get like a check in the mail for a dividend every once in a while? Like, what access did you actually have?
14:07 Speaker 04 So my understanding is that you would get a check in the mail. In fact, oftentimes, they wouldn't come in the mail. You'd actually go to the brokerage house itself. And in some cases, they would keep that for you and sometimes either reinvest it or keep it on like a ledger, if you will. But I don't know the specifics exactly of how you would deal with your dividend, when and if you got it.
14:28 Joe Weisenthal? One thing I really like in the book is all these different characters from American, from world history, you telling the story of them getting really obsessed with the US stock market. So Winston Churchill, on an early trip to the United States, gets really into margin trading. I think like you talk about Groucho Marx or something, getting really into.
14:45 Speaker 04 So to me, that was also like a great surprise.
14:47 Joe Weisenthal? And that was also not something I had read about.
14:48 Speaker 04 I had no idea that Winston Churchill shows up. In New York, actually, this has 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 money, of course, like everybody else. He ends up going to a dinner with all the leading bankers the night that the market completely and utterly tanks. And similarly, I didn't know about it either, but you know, Groucho Marx was living in Long Island. And basically, I shouldn't say he was living in Long Island, but he was recording his son. He was really living at a brokerage house, trying to re-tape every day. And he ends up having to mortgage his home to pay for the margin calls when they called.
15:48 Tracy Alloway? There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets fast. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.
16:14 Speaker 01 This is the Bloomberg Tech Minute, brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Businessweek's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs. And hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices.
16:58 Speaker 01 But according to recruiters, advisors, and those who've interviewed for jobs there. It's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates quote "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Get started at ChatGPT.com.
17:38 Tracy Alloway? Some people did make money. Going back to our intro, very few people managed to make money, but some of them did in spectacular amounts. Can you talk a little bit about Jesse Livermore?
17:48 Speaker 04 Ah, the great Jesse Livermore. There's been a lot written about Jesse Livermore. Jesse Livermore is a character in this book. Of course, I don't know if we should give away the ending for those who don't know, but Jesse Livermore ultimately shoots himself in the head in 1941 over at the Sherre Netherland, just a couple of blocks from here.
18:04 Tracy Alloway? There's a lot of people shooting themselves in the head in this book.
18:06 Speaker 04 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 failure in most of '27 and '28 and '29 because the market kept going up and he was almost out of business. And then he goes back in in the fall of '29 and makes something like $100 million plus. But of course, like I think any of these sort of super emotionally complicated people, he ultimately loses it, I mean, quickly.
18:47 Speaker 04 And then, you know, makes a little bit more, loses a little bit more, makes a little bit more and then... Loses, well, everything.
18:55 Joe Weisenthal? You said that when you started this book, you know, you started a decade ago. So it was not about some attempt to make a parallel today.
19:02 Speaker 04 Right.
19:02 Joe Weisenthal? Even though the timing may, things are very crazy these days. Many people would say. I've always been curious about this, Chris. When I read history of any sort, the brain can't help but try to find parallels to the present.
19:14 Speaker 04 Yes.
19:14 Joe Weisenthal? I think, at least for me, it's like, oh, this is just like this. This is just like this. When you're doing the process of writing history, do you have any mechanisms in place to avoid the temptation to sort of overdraw parallels? Because that must be incredibly tempting to find the details that feel salient and similar today. This is the Nvidia of the time. This is the Kathy Wood of the time. This is the whatever.
19:37 Speaker 04 So yes and no. I think it wasn't until two years ago, when I was getting closer to being finished, and also sort of 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
19:56 Joe Weisenthal? Yeah.
19:56 Speaker 04 as similar, oddly enough. But all of a sudden, you're starting to see these debates that they're having in literally the spring of 1929 about whether to raise or lower interest rates and how they're going to try to end speculation within the New York Fed. And to some degree, the political pressures that are around them, and you start to say yourself, well, that seems kind of, I've been hearing a lot about that. So I hesitated to sort of overdo it.
20:24 Joe Weisenthal? Yeah.
20:25 Speaker 04 But I also was cognizant that I imagined readers who were reading it might think about some of these things. And one of the decisions we made in particular, I remember having lots of debates with my editor about, was nowhere in the book did we ever want to stop the reader and take you out of 1929 and say, hey, by the way, this is kind of like that, or this is kind of like that. Some readers may see these parallels or different things themselves. Some may never see them.
20:50 Joe Weisenthal? Yeah.
20:50 Speaker 04 And some may come up with completely different parallels. And I would love that, frankly.
20:55 Tracy Alloway? I have a parallel. Okay, something that happened slightly after the crash is Smoot-Hawley, right?
21:00 Speaker 04 Yes.
21:01 Tracy Alloway? The tariffs. And today, we are in the Trump administration with very broad, widespread tariffs.
21:08 Speaker 04 Yeah, that wasn't on my bingo card when I was writing that originally.
21:11 Tracy Alloway? I'm curious, how much of the subsequent Great Depression would you attribute to those sorts of economic policies versus the stock market crash itself?
21:22 Speaker 04 So I actually think there was a lot of bad decisions and dominos that came after the crash itself that really is what put us into the Great Depression. So I look at the crash, and really only the first half of this book is about the crash itself, as sort of the first domino of a series of things that were sort of the necessary ingredients to create the depression. So, you know, when you think about all of the bad decisions, the tariffs are one of those decisions. The idea that Andrew Mellon, who was our Treasury Secretary, who was effectively saying, let these capitalists eat it. They were speculating, let them suffer. You know, when you think about the fact that the Fed really did very
22:07 Speaker 04 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 it 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 move. They knew there was speculation, but if they had said, okay, we're going to really just raise interest rates. By the way, it wasn't that we're going to lose their jobs. I think they actually feared that maybe there wouldn't be a Fed. So I think there was sort of the confluence of all of these different things. We can talk about the gold standard. I mean, there's sort of a series of things that that take place that lead eventually to 9,000 banks going out of business and unemployment at 25%.
22:46 Joe Weisenthal? It's interesting, speaking of the Fed, because these days, there's all this question of like, we're looking at financial conditions, we're looking at real economy, et cetera. It's interesting how maybe the Fed didn't do enough to curb speculation, or maybe at some point, didn't do enough to counteract the downturn. But they were very keyed into the rate on margin lending as one of their main tools that they had in their toolkit.
23:12 Speaker 04 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.
23:36 Tracy Alloway? Moral suasion, right?
23:37 Speaker 04 To which the bankers said, what are you talking about? How are you define what a 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 what really led to all of this.
24:06 Tracy Alloway? There's another parallel, speaking of the Fed. This might be pressing it or 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.
24:37 Speaker 04 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.
25:22 Speaker 04 But I think that 1929 and what happened in the markets just got so far away from them that they realized that there was nothing ultimately in the end they could do and they didn't know that until it was too late.
25:34 Joe Weisenthal? So 1907, literally 100 years before our crash, the great financial crisis, that leading to all of this overconfidence that there is just an endless series of tools that the government has to stop anything and then we get to the 1920s.
25:48 Speaker 04 You're making your own parallels now.
25:50 Joe Weisenthal? How do you not, how do you?
25:51 Tracy Alloway? How can you not?
25:52 Joe Weisenthal? That's what the brain does and I don't even, like, I'm not even arguing there's a parallel, I just think that the brain naturally sees these things and we can't avoid it.
26:00 Speaker 04 By the way, we're in 25, so we still have four years.
26:02 Joe Weisenthal? Okay, we have four more years. Now, this is not financial advice, but in four years, I'm gonna try and make my money. Wait, maybe this, I'm gonna ask you something, I don't know if there's, you may not even wanna answer. This could be like a really good movie or TV show on Netflix.
26:15 Tracy Alloway? Oh, yeah. Yes, I thought, it's very Gilded Age.
26:18 Joe Weisenthal? It's very Gilded Age. I had that thought too. Can you give us a little news here?
26:21 Speaker 04 I don't have any news for you.
26:23 Joe Weisenthal? You're co-creator of Billion.
26:24 Speaker 04 Happily, there's a bunch of folks in Hollywood who've been reaching out recently and there's some conversations going on, but no news and, you know, that's one of those cross your fingers kind of things.
26:36 Joe Weisenthal? We could officially say that we think it would be a good show.
26:38 Tracy Alloway? We want cameos.
26:39 Joe Weisenthal? Yeah, we want cameos.
26:40 Speaker 04 We can organize that. This is a period piece, so we're gonna have to.
26:44 Tracy Alloway? I love it, yes.
26:45 Joe Weisenthal? Tracy could be the astrologer that hangs out, was it the Algonquin Hotel and gives out stock tips based on?
26:51 Speaker 04 The Plaza Hotel.
26:52 Joe Weisenthal? Okay, tell us about that.
26:53 Speaker 04 So you're talking about Evangeline Adams.
26:55 Joe Weisenthal? Yeah, tell us about her.
26:56 Speaker 04 She was an astrologer and an astrologer who was taken shockingly seriously at that time by all sorts of financiers. Before he died, JP Morgan himself was famous for going to visit with her. She had an office in Carnegie Hall and she would literally sit inside the Plaza Hotel and people would come up and talk to her, to visit with her, she had a newsletter. And then, and by the way, interestingly, in October of 1929, as the market is crashing and people don't always appreciate, the crash really happened over several days, it was not just one bad day, she would have these almost like seances where people would come to her office and she wasn't doing one-on-ones at that point because the groups were so big.
27:40 Tracy Alloway? She was summoning the animal spirits.
27:42 Speaker 04 Yes, and she was praying for, of course, for higher stock prices. Interestingly, She got a lot of credit for the stock market boom because in the fall of 29, I think, right after Labor Day in September, a reporter called her and asked her what was in the stars, of course, and she told everybody that the market was going to go up.
28:03 Tracy Alloway? Yeah. There's another thing that you write about in your book, which, again, could be a potential parallel, which is, I guess, the role of technology back then. And I'm thinking about the recent banking crisis, mini drama, whatever you want to call it, where rumors about the health of the bank flew around really, really quickly on social media and in private chat groups and things like that. And some people thought that contributed to a lot of the problems. In the 1929 crash, how quickly did information disseminate and how quickly were the share price drops actually reflected on the exchanges and communicated to other people?
28:45 Speaker 04 Glacially. So one of the big technological problems in 1929 was that the quote-unquote "big board," the New York Stock Exchange, would often fall behind, literally by hours. So you could be looking at the board, thinking that you know what the score is, if you will, what the 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. So their numbers were hopelessly outdated. And when you see pictures of thousands of people on the streets of Wall Street, those famous pictures in October
29:29 Speaker 04 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, you know, half a day, a day.
29:56 Tracy Alloway? They're sending pigeon carriers. The latest stock price.
29:59 Joe Weisenthal? Well, Jesse Livermore, like, he had his own phone lines, right?
30:03 Speaker 04 Yes, he was the citadel.
30:05 Joe Weisenthal? I was literally gonna say he was the Ken Griffins setting up a satellite in his dorm. Or any one of these people who later on tried to get a faster line to the exchange with microwave towers. He did that with phone lines.
30:16 Speaker 04 He did with phone lines and his own people, literally down on the floor, that were then calling in the bids back to his office so that he would have better information than other people.
30:27 Tracy Alloway? Phone lines were the lindy latency of the time.
30:30 Joe Weisenthal? Yeah, they were.
30:30 Tracy Alloway? That's what I say.
30:48 Speaker 01 This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs. And hands-on experience matters more to recruiters than advanced degrees. With the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices.
31:31 Speaker 01 But according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.
32:12 Speaker 05 This is the Bloomberg Market Minute brought to you by Comcast Business. The markets faced plenty of challenges this year. Rising energy costs, higher interest rates, pushback to massive artificial intelligence spending. But through it all, stocks keep breaking records and some analysts think they still can with a focus on the fundamentals. Nadia Lovell is head of global equity strategy at UBS.
32:33 Speaker 06 Earnings has been good and continues to be good. And while, you know, we might be past the peak in earnings growth, we're not past the peak in earnings level.
32:42 Speaker 05 But others like Miller Tabak strategist Matt Maely say those challenges could eventually lead to a downturn.
32:47 Speaker 07 Whenever we see a significant rise in bond yields like we have and a significant rise in oil prices like we have, the stock market always or pretty much always ignores it for a while.
32:57 Speaker 05 And Wall Street may be starting to take notice. A recent Citigroup index shows more analysts cut rather than raise their earnings forecasts for corporate America for the first time in more than five months. That was the Bloomberg Market Minute brought to you by Comcast Business, one partner powering 90% of the Fortune 500 and millions of small businesses. When you add it all up, no one does business like Comcast Business.
33:25 Tracy Alloway? Okay, another parallel. I'm just going to throw out parallels.
33:27 Speaker 04 I love it.
33:28 Tracy Alloway? And you can agree or disagree.
33:29 Joe Weisenthal? Who was the Andrew Ross Sorkin of the time?
33:31 Tracy Alloway? Oh, there we go. Was there an Andrew Ross Sorkin of the time?
33:34 Speaker 04 Well, there was an Alexander Noes was the business editor of The New York Times and he was a pretty respected guy. So I think that would have been.
33:42 Joe Weisenthal? So that's.
33:42 Speaker 04 I would, I would, I would take that.
33:44 Tracy Alloway? All right.
33:45 Speaker 04 Interestingly, there was a reporter.
33:47 Joe Weisenthal? What was the odd lots of the time?
33:48 Speaker 04 Walter Lippman.
33:50 Joe Weisenthal? Oh, you know, I downloaded a Walter Lippman.
33:52 Speaker 04 So Walter Lippman was a very interesting journalist because he was, he was very insidey. He had a very close relationship with Thomas Lamont at JP Morgan. Some people might've said back then afterwards, too close.
34:05 Joe Weisenthal? Okay, that's not.
34:06 Speaker 04 He then turned around though, actually, after a lot of these things emerged and sort of really went after them. So I don't know, there's, there was all, but the other thing I should say, we as a group, meaning the journalistas, did not cover ourselves in glory, in part because a lot of these people were being paid off physically, like with cash. I mean, talk about manipulation. There were no insider trading laws. People were literally going up to reporters, forget about taking them out to dinner. They were saying, here's money, and please write an article saying, such and such stock is, you know, bound to move higher tomorrow because some rumor.
34:40 Tracy Alloway? Okay, so another parallel. Just keep going. People talk about AI nowadays, and you see these charts of these sort of, I always say it's an incestuous relationship between all the different AI companies where so and so is buying from this company, and then they're lending to this company, and it all kind of comes full circle. When you think about the 1929 crash, a lot of it was, you know, businesses issuing stock in order to borrow money, in order to invest in more stocks. Any similarities there? That sort of self-circular dealing?
35:12 Speaker 04 Well, if you think about these investment trusts, there were so many investment trusts that turned into sort of leverage upon leverage, that were like Russian dolls of leverage, and you didn't really even know what was inside of them. I don't know if I can look at, fully at the AI companies like that just yet, though I think there are probably certain types of deals and vendor financing, sort of arrangements that should be raising questions. But you could look at the world of crypto, actually. You could look at, you know, Strategy Group is an interesting, I mean, is, Strategy is like an investment trust. That's actually what it is. A lot of these trusts that are emerging, that's what they are. The question of course is-
35:48 Joe Weisenthal? This is the erstwhile MicroStrategy, just for people, right? For people who haven't been paying attention to the name, yeah.
35:53 Speaker 04 Yeah, formerly MicroStrategy, Michael Saylor. And so there are these businesses that have similarities. Again, I don't want to tell you that Strategy is a 1929-style investment trust, per se. I don't know.
36:04 Joe Weisenthal? I said in the intro, you're like, have all these affiliations, you're still doing Dealbook, all of this other stuff, like, what is, what are you up to these days?
36:13 Speaker 04 Dude, we grew up together.
36:14 Joe Weisenthal? No, no, you're like, but like, what is your, because you're still doing all of that. I've like pared back a bunch of, I don't do TV anymore, etc. Like, what is your, like, day?
36:20 Speaker 04 But I used to wake up with you and I-
36:22 Joe Weisenthal? You used to, but then I stopped because I got tired and you didn't. So what I want to know is like, tell me about, what's a day like for you these days? What are you up to?
36:30 Speaker 04 So I wake up usually around 4:30-ish. I usually do-
36:36 Speaker 04 Sort of the final pass on some Dealbook stuff till, call it, 5:10-ish. Oh, wow.
36:43 Joe Weisenthal? Do you just go straight to the computer?
36:44 Speaker 04 Yes, oh, straight. There's no, there's no, yes. No, when the alarm goes off, up, up, up. And then I do Squawk Box, oftentimes still fixing things in Dealbook up until the bitter end. And that usually goes till about 9:00. 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 a busy day that doesn't typically end till the end of the day.
37:23 Tracy Alloway? What time do you go to bed?
37:24 Speaker 04 I try to go to bed. I try by 9:30.
37:27 Tracy Alloway? Okay, that's reasonable.
37:28 Speaker 04 If I can be in bed by 9:30, this can work.
37:31 Tracy Alloway? Yeah.
37:31 Speaker 04 If it gets to 10:00 or 10:15, or any time after that.
37:35 Joe Weisenthal? Yeah, that's gonna be a rough day the next day.
37:36 Speaker 04 The next day is not a good day.
37:38 Tracy Alloway? Okay, well, one of the things you're known for is, you know, you have a lot of access. You know a lot of people. What are you hearing right now? You don't have to name names, obviously. But what are you hearing, general opinions about the market? And maybe the influence of policy from the Trump administration?
37:54 Speaker 04 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 that 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.
38:38 Joe Weisenthal? Yeah.
38:38 Speaker 04 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. 1920s, we talked about democratizing finance. That was like a big concept. Now, this whole idea of democratizing finance in the context of putting private credit and private equity and venture capital inside your retirement accounts and 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 underlying agita.
39:13 Joe Weisenthal? 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?
39:24 Speaker 04 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 this story in the book because I didn't know if it was appropriate, but I'll tell it to you. My grandfather was 11 years old. He's no longer alive in 1929. His brother was a messenger boy and he was down there in October of 1929. He used to tell this story and he was helping his brother and he watched somebody jump out of a window. And he lived till he was 91 years old and he never bought a share of stock in his entire life. Bought some bonds, never stock.
40:06 Speaker 04 And he would always say, Andrew, this whole stock market thing, not for us.
40:11 Tracy Alloway? Too risky.
40:12 Speaker 04 And so I, when I say shattered a nation, I mean, I think it did to some degree, come close to shattering the psyche of a nation. Did it come close to a civil war? No.
40:22 Joe Weisenthal? Yeah.
40:22 Speaker 04 But clearly, the idea of unemployment being 25% in America, that there were shanty towns, otherwise known as Hoovervilles, literally in Central Park. It was a couple of blocks from here. And then, you know, worse in so many other places. I think for a generation of people, it felt like a shattered nation.
40:41 Tracy Alloway? Yeah, you don't really go beyond the 1930s in the book, but it does feel like it took a very long time to rebuild, I guess, trust in the stock market. We didn't really see retail like dive in a lot until, I guess, the 1960s, something like that.
40:56 Speaker 04 Yeah, I think that's right. I think that goes a little bit to the sort of generational divide. Look, the other piece of this is the book doesn't go into, you know, World War II and all the things that happened after that. But that's actually, I think, coming out of World War II is what ultimately led to sort of the boom again. To the extent we had one in the US and obviously the market's boom. And the reason why people, I think, started to get back in the market was because the market kept going up. And people started to look at the market like they always do. And when they think that the train is leaving the station and they're not on the train, they think, I gotta get on the train.
41:30 Joe Weisenthal? Totally back to something you said before. It's interesting that these CEOs don't really speak their mind when the whole thing in January was like, finally, free speech. We can talk again. We can, we can say all the things that we've been hiding. It's kind of messed up, isn't it?
41:45 Speaker 04 Look, you'd think that there should be real free speech taking place and that people could raise their hand.
41:51 Joe Weisenthal? A liberal attitude towards speech.
41:53 Speaker 04 But I think right now, the view is, what's the trade off? I think there are people who look at certain things happening in Washington and say, I don't like what's happening. If I raise my hand now, if I raise my hand today, what is the upside for raising my hand? And what is the downside for raising my hand? I think they look and say, there's very little upside, actually, because the chance of real change in this moment right now is unlikely. Maybe when we get to an election or midterms or other things, I don't know. And the chance of, you know, on the downside is high. I mean, I think that between what we've seen, the administration do to law firms, to universities, the whole Paramount CBS story, taking stakes in Intel and other things.
42:36 Speaker 04 I mean, I think there's real implications if you're a business leader today about how you approach your job. Every business leader is almost have to become a politician.
42:45 Joe Weisenthal? Yeah.
42:46 Tracy Alloway? All right, this is a very journalistic, classic, cliche question. I feel kind of bad, but you're another journalist, so you know, don't judge me.
42:54 Speaker 04 No.
42:55 Tracy Alloway? If you could, I guess, take away one lesson from the 1929 crash and really emphasize it to politicians, policymakers, regulators, business people, whoever, what would it be?
43:07 Speaker 04 Every financial crisis is a function of one thing, is leverage in the system, too much leverage. You actually can have speculators and all the bad actors you want doing all the bad things you can imagine on stage, but it's the leverage that tips it over. And as a result, you need to have guardrails to prevent that because the human condition is to want more, right? That's what the investor class, it's, I hate to say it, the idea of self-regulation is very, very difficult. People do not regulate themselves, they just don't. And so we just need to be super careful, especially when there are all these kind of new products being developed and other things, we don't know where the
43:52 Speaker 04 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.
44:05 Joe Weisenthal? Well, we have four years between, for, until the 100-year anniversary of the 1929 crash. Andrew O. Sorkin, so thrilled to finally have you on the podcast. The book is a great opportunity. It's really great work.
44:16 Speaker 04 I really appreciate being here.
44:17 Joe Weisenthal? It's really cool that you did this. Everyone should be very impressed and everyone should check it out. It's great history and I hope it becomes a TV show.
44:24 Speaker 04 Thank you. I hope, I hope I can come back here in 2029, if not before.
44:27 Tracy Alloway? Please, for sure.
44:29 Joe Weisenthal? And then 23rd, yeah. All right, that was fantastic.
44:31 Speaker 04 Thank you. I appreciate it. Thanks, guys.
44:32 Tracy Alloway? Thank you so much.
44:45 Joe Weisenthal? Tracy, that was a lot of fun. I love bubble history. We used to do tons more episodes on bubbles. They're always really fun.
44:51 Tracy Alloway? Well, you know, the Florida land bubble gets mentioned in here.
44:55 Joe Weisenthal? Yeah, we did a bunch of episodes on that. And this is really cool. I love all the pop culture elements, the Winston Churchill, the Groucho Marx.
45:03 Tracy Alloway? Astrologer.
45:04 Joe Weisenthal? It's incredibly rich story. It's incredibly rich piece of history.
45:07 Tracy Alloway? 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?
45:15 Joe Weisenthal? Wait, is there any time? Was that a bubble? I didn't know about that.
45:18 Tracy Alloway? Apparently. And sheep. I want to do New England sheep, too. I want to do all the animal bubbles.
45:23 Joe Weisenthal? Let's do it. Let's do them all. There's the bat, the guano bubble. We've never done an episode on that. But the one other thing, too, is I think like, you know, 2007, 2008, the Great Financial Crisis, that was like a debt bubble, right? There were a bunch of assets that were expected to pay back at a dollar on the dollar. And they like paid back at 90 cents or whatever. And then people panicked and there was a bank run.
45:43 Tracy Alloway? There's still a lot of credit tied to it.
45:45 Joe Weisenthal? There was a lot of, there was definitely the leverage.
45:47 Tracy Alloway? The debt was being used as collateral.
45:49 Joe Weisenthal? The debt was being used as collateral. But it was, you know, right now, we don't, it just feels like it's a stock story. It's a, it's a things, everyone wants access to the right tail of whatever. And everyone wants the big score, et cetera. And that's what sort of 1929 reminds me of. This idea, like different than a sort of like housing bubble, just this idea, like, everyone wants those right tail outcomes, including Winston Churchill and Groucho Marx.
46:12 Tracy Alloway? Well, you know, the chart that the doomers always tweet is the margin debt chart, right? And, you know, I have doubts about that because the margin debt chart goes up when stocks go up, basically. But it is at record highs, so.
46:25 Joe Weisenthal? Anyway, people should definitely check out this book.
46:27 Tracy Alloway? All right. Shall we leave it there?
46:28 Joe Weisenthal? Let's leave it there.
46:28 Tracy Alloway? This has been another episode of the Odd Lots Podcast. I'm Tracy Alockway. You can follow me at Tracy Alockway.
46:34 Joe Weisenthal? And I'm Joe Weisenthal. You can follow me at thestalwart. Follow our producers, Carmen Rodriguez at Carmen Armand, Dashell Bennett at Dashbot, and Cale Brooks at Cale Brooks. For more Odd Lots content, go to Bloomberg.com/oddlots. We have a daily newsletter and all of our episodes. And you can chat about all of these topics 24/7 in our Discord, discord.gg/oddlots.
46:55 Tracy Alloway? And if you enjoy Odd Lots, if you like it when we talk about the crash of the 1920s, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.
47:47 Tracy Alloway? Congratulations, you've built a dashboard. But now comes the follow-up question, and the follow-up to the follow-up, and the dashboard for that. Meet Hex. Give everyone the power to ask their own questions, explore data, and build with AI, all in natural language. Because every answer should spark another question, limited only by your curiosity, not your data team's bandwidth. Go deeper than dashboards. Join over 2,000 leading data organizations. Visit hex.ai.
48:18 Speaker 01 If you're a business owner, you need a card that can keep up. With the Delta SkyMiles Reserve Business American Express Card, everyday purchases transform into miles you can use towards future travel. So business as usual can lead to a well-deserved getaway. And for a limited time, card members can earn 200,000 bonus miles, the highest miles offered this year. Whether you're traveling for business or planning your next adventure, now's a great time to make every purchase go further. Apply today at www.deltacom/podcast. Offer ends November 4th. Minimum spending
48:52 Speaker 05 Requirements and terms apply. The world of business is constantly evolving and Comcast business keeps you totally in step with secure AI-backed networking in more than 100 countries. They're powering over 90% of the Fortune 500 and millions of small businesses. That's a lot of muscle. And behind it all, thousands of experts answering your call at 2 a.m. like it's 2 p.m. One partner powering how business gets done for companies around the globe. When you add it all up, no one does business like Comcast business.
49:23 Tracy Alloway? Most meeting note takers get the easy words right and the important ones wrong. The client's name, the acronym. Whisper Flow Note Taker is built to get the hard words right. It takes notes on any meeting platform. Zoom, Google Meet, Teams, even WhatsApp calls. Keeps every meeting searchable and connects to Claude or ChatGPT. So you can ask, what did we agree to last Tuesday? Free to try on Mac and Windows at whisperflow.ai. That's W I S P R flow dot AI.
Previous John Ganz on the Era When America Was Consumed by Panic With Corporate Japan Next Why Argentina Needs Bailout After Bailout After Bailout Page updated November 1, 2026 · transcript and summary are machine-generated
