Andrew Ross Sorkin on the Stock Market Crash That Shattered America

SPEAKER_2 (0:02)

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Joe Weisenthal (0:18)

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

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:24)

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.

Tracy Alloway (0:38)

It's a culture of lines, lines going up, people watch the lines.

Joe Weisenthal (0:42)

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.

Tracy Alloway (0:49)

A Bitcoin chart, yeah.

Joe Weisenthal (0:51)

At any given moment.

Tracy Alloway (0:52)

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

Joe Weisenthal (1:07)

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 really good. I'm really happy. I'm really relaxed.

Tracy Alloway (1:25)

The people who nailed the timing are pretty pleased with themselves, I assume.

Joe Weisenthal (1:29)

And there's like five of those people. You know? That's the problem. Afterwards, someone's like, oh, I sold the top. I feel good.

Tracy Alloway (1:34)

Yeah, absolutely. Okay, so famous crashes. We're going to talk about one of them.

Joe Weisenthal (1:38)

You know, I remember the.com era very well. I don't remember the market environment we're going to talk about.

Tracy Alloway (1:44)

The 1920s? You have no memory of that? Shame on you.

Joe Weisenthal (1:48)

I don't remember 1929 very well. I did read John Kenneth Galbraith's famous book, The Great Crash. But there is a new book out on the great stock market boom and then crash of 1929 We are going to be speaking with the author, someone I'm thrilled to talk to, someone whose accomplishments and work ethic puts us all to shame. We're going to be speaking with the one and only Andrew Ross Sorkin, founder of Dealbook at New York Times, co-creator of Billions, co-host of some Squawk Box, CNBC. I made that joke when we had Jim Cramer on, as if I had never heard the network. 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.

Andrew Ross Sorkin (2:29)

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

Joe Weisenthal (2:33)

Amazing.

Andrew Ross Sorkin (2:33)

Thank you.

Joe Weisenthal (2:34)

So this isn't the first time 1929 has been written about in the Galbraith book. That was up until now probably the most famous book, right?

Andrew Ross Sorkin (2:41)

That was a great book, yeah.

Joe Weisenthal (2:43)

What was the impulse to go back and write a book about this period of time?

Andrew Ross Sorkin (2:47)

To be honest with you, it was about 10 years ago. I'd 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 read the Galbraith Book. But sort of beyond that, I was lacking details. And I honestly 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 poured through them. And I thought to myself, why can't I understand who the characters are? Like the people at a visceral level, like what were they saying to each other?

What were their motivations? What were their incentives? Who was sleeping with who? What was really happening here? And I grew up sort of loving books like that written by Michael Lewis or Jim Stewart with Den of Thieves.