Pushkin.
I'm Leady agen Kott, I'm Michael Lewis, and we're here with a special kind of bonus episode of The Big Short Companion podcast.
Yes, which you've heard because you were there for it live. I was interviewed by Nicole Wallace at Symphony Space and you were in the audience. And there were a few wrinkles to this interview that made it really fun. One it was Nicole Wallace, and she's a fabulous interviewer, and I've been on her show on MSNBC and she has a devoted and large.
Following, and there's a reason for it.
Two was, as we'll hear, an actor came out at the beginning of the show and performed one of the passages from the book and he was so much better at reading my book than I was, and I was mesmerized. It was like I was listening to the thing for the first time. And the third was that characters from The Big Short were actually in the audience, and that was a rare treat for me to be able to talk about them in front of them.
Could you see them? They were like kind of in the front row. I was kind of trying to watch them out of the corner of my eye.
It was Danny Moses, Vincent Daniel, and Porter Collins. And they're so loud. I could not see them because of the stage lights, but I could hear them. I could hear them laughing, you know, So that was a good sign. So that made it kind of fun. And it was just fun to like recap this whole thing. And it's a great I feel like it's a great way to end our little season.
And there are even stories that you told Nicole Wallace that I had never heard before.
This I find hard to believe.
But it's nice that there's.
Still a few coming up.
Michael Lewis and Nicole Wallace recorded live at Symphony Space in New York.
This is sort of celebrating an anniversary of the Big Short and and you've just released a new audio book in your Own Boys, in your Own Telling. What is it like to relive this story?
First? You really should give me credit for having the balls to come out for two days of media for a book that's fifteen years old.
Well, I'm taking notes. I want to know how it's done.
I do feel like I do feel this is the last thing I'm doing, and I do feel I need to come clean to someone about why we're doing this. We happy? Can I be this? Can we just do it?
Here?
Are we safe space? Yes? Safe space? Safe space?
You guys in.
Sas safe space and nobody's going to talk about it.
No it well this is classified.
Okay. So what happened was a few years ago the rights, the audio rights to Liar's Poker came back to me. And the audiobook market is what's changed. It's the biggest change in the way books are consumed in my career and in the old days, in olden times, even big short times, there wasn't a whole lot of effort that went into making the audiobooks. And in the case of like Liar's Poker, the audiobook was cassettes on you know, really you got a box. You got this giant cardboard
box full of cassettes if you ordered it. So we thought. I thought with Pushkin my podcast company, and I'm a kind of an itinerant podcast right now, I'm not on all the time, but I do this. See I'll do seasons from time to time that it would be it would be fun to just try to redo the Liar's Poker and see if see if anybody would be interested.
And we did a podcast season alongside of it, and the thing just took off, I mean, and so we thought, hmmm, like these things are coming back, Big Shorts coming back, Moneyball's coming back, the blind Side's coming back, all these books that are coming back, and this chance to uh make free money. It's really great. But also it's kind of fun to revisit the stories. Like I never reread my books. I don't think about them. They really just
kind of they're in the back past. And this one, this had Moneyball in particular, we're still living in a world that it was sort of just and it seemed relevant. So we did recorded the book a couple of months ago when we have a new fancy audio book, but we have a seven episode podcast with going back and looking at the consequences of the financial crisis, talking to some of the characters in the book. Some of them were here. I think they got in Danny Moses, Vincent,
Daniel Poor Collins. Did they hear, Yeah, there we go and I think that's all. I think that's all that's here, and there's an and it was. It was It's just interesting, still interesting, still in the air.
It's riveting. I mean I and I'm so glad that you brought it back to the people because your gift to the story we're telling every day in the news is that it is very easy to shorthand everything. But there's nothing that you experience on a more human level than the human stories. And so I want to spend tonight talking about these humans.
Do you want me to start now I start talking, I kind of don't say.
Give me one Give me one note on the humans and then we'll listen.
To this elevated the human There was a logic to the book. There was there was The book got cast in a way no book I have ever written has gotten cast, but in the way the book I'm writing now is getting cast. And and I will explain that logic after we hear the reading.
So without further ado, this this is I mean, you are always a highlight. This is really going to be They're.
Here for you.
No, no, no, Now, Zach Renier is going to do reading from from the book.
It had been four days since Lehman Brothers had been allowed to fail. But the most powerful effects of the collapse we're being felt right now. The stop of Morgan Stanley and Goldman Sachs were tanking, and it was clear that nothing short of the US government could save them. It was the equivalent of the earthquake going off, Danny said, And then much later the tsunami arrives. Danny's trading life was man versus man, but this felt more like man
versus nature. The synthetic cdo had become a synthetic natural disaster. Usually, you feel you have the ability to control your environment, said Danny. You're good because you know what's going on now. It didn't matter what I knew. Peel went out the window. Front Point had maybe seventy different bets in various stock markets around the world. All of them were on financial institutions. He scrambled to keep a handle on them all, but couldn't.
They owned shares in Key Bank and were short the shares of Bank of America, both of which were doing things they had never done done before. There were no bids in the market for anything, said Danny. There was no market. Was really only then I realized there was a bigger issue than just our portfolio.
For fundamentals didn't matter.
Stocks were going to move up and down on pure emotion and speculation of what the government would do.
The most unsettling loose.
Thought rattling around in his mind was that Morgan Stanley was about to go under. Their fund was owned by Morgan Stanley. They had almost nothing to do with Morgan Stanley and felt little kinship with the place. They did not act or feel like Morgan Stanley employees. Heisman often said how much he wished he was allowed to short Morgan Stanley's stock. They acted and felt like the managers of their own fund. If Morgan Stanley failed, however, its shared and their fun wound up as an asset in
a bankruptcy proceeding. I'm thinking we got the world by the fucking balls, and the company we work for is going bankrupt. Then Danny sends something seriously wrong with himself. Just before eleven in the morning, wavy black lines appeared in the space between his eyes and his computer screen.
The screen appeared to be fading in and out.
I felt this shooting pain in my head, he said, I don't get headaches. I thought I was having an aneurysm. Now he became aware of his heart. He looked down and he could actually see it banging against his chest. I spent my morning trying to control all this energy and all this information, he said, and I lost control.
He rose up from his desk and looked for someone eyes been normally sat across from him, but Ivesan was out at some conference trying to raise money, which showed you how unprepared they all were at the arrival of the moment for which then they thought themselves perfectly prepared. Danny turned to the colleague beside him, Porter, I think I'm having a heart attack, he said. Porter Collins laughed
and said, no, you're not. An Olympic rowing career had left Porter Collins a bit inerd to the pain of others as he assumed that they didn't know what pain was. No, Danny said, I need to go to the hospital. His face had gone pale, but he was still able to stand on his own two feet.
How bad could it be?
Danny was always a little jumpy, That's why he's good at his job, said Porter. I kept saying, you're not having a heart attack, and then he stopped talking and he said, all right, maybe you are.
This actually wasn't all that helpful.
Unsteadily, Danny turned to Vinnie, who had been watching everything from the far end of the long trading desks and was thinking about calling an ambulance. I got to get out of here now, he said. By the time Heisman got the call from Danny Moses saying that he might be having a heart attack, and that he and Vinnie and Porter were sitting on the steps of Saint Patrick's Cathedral, he was in the midst of a slow, almost menopausal change. He had been unprepared for his first hot flash in
the late fall of two thousand and seven. By then, it was clear to many that he had been right and they had been wrong, and that he had gotten rich to boot. He gone to a conference put on by Merrill Lynch right after they had fired their CEO, Stan O'Neill and disclosed twenty billion dollars or so of their fifty two billion in subprime related losses. There he had settled up to Merrill's chief financial officer, Jeff Edwards, the same Jeff Edwards Heisman had taunted some months earlier
about Merrill Lynch's risk models. You remember what I said about those risk models of yours, Eisman now said, I guess I was right.
Huh.
Instantly, and amazingly, he regretted having said it. I felt bad about it, said Eisman. He was obnoxious. He was a lovely guy. He was just wrong. I was no longer the underdog, and I had.
To conduct myself in a different way.
Valerie Fagan watched in near bewilderment as her husband acquired haltingly in fits and starts, a trait resembling tact. There was a void after everything happened, she said.
Once he was.
Proved right, all this anxiety and anger and energy went away, and that left this big void. He wanted on an ego thing for a while. He was really kind of full of himself. Eisman had been so vocal about the inevitable doom that all sorts of unlikely people wanted to hear what he now had to say. After the conference in Las Vegas, he had come down with a parasite. He told the doctor who treated him that the financial
world as we knew it was about to end. A year later, he went back to the same doctor for a colonoscopy. Stretched out on the table, here's the doctor say, here's the guy who predicted the crisis.
Come in and listen to this.
And in the middle of Iman's colonoscopy, a room full of doctors and nurses.
We told the story of heisman genius.
The story of Iceman's genius quickly grew old to his wife. Long ago, she had established a sort of Iceman's social emergency task force with her husband's therapists. We beat him up and said, you really just have to knock the shit off. And he got it, and he started to be nice, and he liked being nice.
It was a new.
Experience for him.
All around.
She and others found circumstantial evidence of a changed man at the Christmas party at the building se door, for example. She wasn't planning to even let Eisman know about it, as she never knew what he might do or say. I was just trying to kind of sneak out of our apartment, she said, and he stops me and said, how will it look if I don't go. The sincerity of his concern shocked her into giving him a chance.
You can go, but you have to behave, she said, to which Eisman replied, well, I know how to behave now, And so she took him to the Christmas party and he was as.
Sweet as he could be.
He's become a pleasure, said Valerie.
Go figure.
That afternoon of September eighteenth, two thousand and eight. The new and possibly improving eyes been ambled toward his partners on the steps of Saint Patrick's Cathedral. Getting to places on foot always took him too long. Steve such a fucking slow walker, said Danny. He walks like an elephant would walk, if an elephant could only take human size steps.
The weather was.
Gorgeous, one of those rare days where the blue sky reaches down through the forest of tall buildings and warms the soul. We just sat there, says Danny, watching the people pass. They sat together on the cathedral steps for an hour or so. As we sat there, we were weirdly calm, said Danny. We felt insulated from the whole market reality. It was an out of body experience. We just sat and watched the people pass and talked about what might happen next. How many of these people were
going to lose their jobs. Who was going to rent these buildings after all the Wall Street firms had collapsed. Peter Collins thought that, well, it was like the world stopped. We were looking at all these people and saying, these people are either ruined or about to be ruined, and apart from that, there wasn't a whole lot of hangaring inside Front Point. This is what they had been waiting for, total collapse. The investment banking industry is fucked, Heisman had
said six weeks earlier. These guys are only beginning to understand how fucked they are.
It's like being a scholastic prior to Newton.
Newton comes along and one morning you wake up, holy shit, I'm wrong. Layman Brothers had vanished, Merrill had surrendered, and Goldman, Sachs and Morgan Stanley were just a week away from.
Ceasing to be investment banks.
Investment bankers were not just fucked, they were extinct. That Wall Street has gone down because of this is justice,
Heisman said. The only one of them who wrestled a bit with their role as the guys who made a fortune betty against their own society was Vincent Daniel Well Vinnie's being from Queen's needs to see the dark side of everything, Heisman said, to which Vinnie replied, well, the way we thought about it, which we didn't like, was by shortening this market, we're creating the liquidity to keep the market going. It was like feeding the monster, Heisman said,
We fed the monster until it blew up. The monster was exploding, yet on the streets of Manhattan, there was no sign anything important.
It just happened.
The force that would affect all their lives was hidden from their view. That was the problem with money. What people did with it had consequences, but they were so remote from the original action that the mind never connected the one with the other. The teaser rate loans you make to people who will never be able to repay them will go bad. Not immediately, but in two years, when their interest rates rise. The various bonds you make from those loans will go bad.
Not as the loans go bad, but.
Months later, after a lot of teds, foreclosures and bankruptcies and for sales. The various CDOs you make from the bonds will not go bad right then, but after some trustees sort out whether there will ever be enough cash to pay them off, whereupon the end owner of the cdo receives a little note, Dear sir, we regret to inform you that your bond no longer exists. But the biggest lag of all was right here in the streets.
How long would it take before the people walking back and forth in front of Saint Patrick's Cathedral, figure out what had just happened to them?
Who thank you for.
That?
Gren proving that the book is always better than the movie.
Oh no, I made such a mistake reading this book myself.
That was incredible.
I should have hired him. Incredible. That was incredible.
That was, of course Zachrenier from The Good Wife, The Good Fight, Ray Donovan, Fame and Tony nominated for thirty three variations. While we're round, thank you.
How did the Volkswagen Beatle go from being Hitler's dream car to a hippie icon? How did a disgruntled center fielder change the business of sports? I'm Jacob Goldstein and on Business History, my co host Robert Smith and I dig into the people and companies who created the modern world. Business history is full of innovations and failures and insights into how business works today. At the end of today's episode of Against the Rules, we're going to play a
clip from our episode about Jim Simon's decades ago. Simon's basically invented modern algorithmic trading, and after a few early hiccups, including buying up all the titles in Maine, Simon's built a machine that generated incredible returns for decades. The show is called Business History and the previous coming up at the end of today's episode of Against the Rules.
I just want to start with the human stories are sometimes hardest to tell because they involve such meticulous reporting. You can't just you can't get it wrong. They're real people, and it strikes me that the Big Short is a story about what happens when the reporting doesn't happen, when people don't pursue the facts and they look the other way. And so I want to know what it is in you that inspires you to report out stories like this.
I'll try to end with that. And I want to end the whole night by telling my own colonoscopy story.
I mean, that's t we call that a d I've.
Got it, So you go.
I'll bring you back to my question very end.
You do, okay, because I MS kolonoscopy story was pretty great. I have one. So so the logic of the book, how the it was so it was an incredibly complicated story, right It's a hairball of a story.
It's like a story in Washington.
Right now that it's very hard to tell. It in from eighty thousand feet in a way that's interesting. It's too it's just too complicated. And however, there was a simple there's a beautiful simplicity to the story, and the beautiful and this is the penny dropped for me pretty early on that the simplicity was you could think of the financial world as a simple bet, a giant bet, and the financial will had organize itself around the bet.
And on one side of the bet was virtually all the big firms on Wall Street and the international banks and so on, and it was a bet on the subprime mortgage market, and on the on the on the other side of the bed, where all these people.
Know what I'd ever heard of.
And and the question was, how had the people on the wrong side of the bet, the center of the financial system, become the dumb money? How did they end up on the dumb side of the bet? So I go out to answer that question.
When you figure out that structural frame.
I figured that's the first thing I figure out. I figure out that, Oh I could tell this story. I can make it simple for a reader by just it's just a bet. It's a single and you're are on one side or the other. And then so what I do then, is I go out and get a list of everyone who was on the right side of the bet.
Now there were probably thousands, but people who were really on the right side of the bed, who kind of laid it all on the line, and they were maybe twenty five twenty and I went and met I think all of them. Not all of them would talk to me on the record, but I got to know all of them, and all of them agreed to kind of inform my understanding. But that was that because the beginning what was essentially a casting search. Because what happened is
I talked to them. I realized that there was another way to think about this. There were different ways to get to the right answer, to get to the right side of the bet. They weren't all doing the same thing, but they were categories. They were kind of three ways that people got to the right side the way these guys did, the guys that you just heard about it started. They had just a deep history in the subprime argue.
It went back to the nineties. Eisman and Vinnie both knew that it was a predatory market that was squirreling, and they smelled trouble because they had had this history but they were kind of I realized that broadly three ways people had got to the right answer. And then they all those twenty characters who were on.
The right side in a big way.
I could classify them into those buckets, and then thought I got to know them well enough to figure out who would be essentially the most fun and the most interesting to the reader and the best teacher with the least overlap in kind of how the characters sounded almost like a singing group, so that I picked the three characters that way, and then that's when I really get to know them. So that's when I'm in their lives a lot. And these guys would tell you I'm in
their office. So I was in their office all the time. I walked around the neighborhoods they grew up in. I got to know in some cases their families, and you know, it was it was immersive that way, and it has to be immersive that way, because in the beginning when
I walk in, they're all self conscious. They're all as you would be, like he's coming to write about us, and I need to be around so much that it gets they get weary of being self conscious that they just and they just drop it and I could just see who they are. They get to the point where they surrender, I give up, You're going to know who I am. Here I am. And these guys are actually pretty quick to that, as they were less afraid of
themselves than some of the other characters. But so that so that's the That was the logic.
To the book.
And it was once I figured out the logic to the book, it was so easy to write it, like you were dealt the best handed bridge ever, and how just how you're going to play the cards and uh, and it was just so much fun. It wrote itself, and it was a very easy book to write.
It's interesting to look at it now though you couldn't, not that you forget, but the time in which you're reporting it out and telling their stories, the country is still very much traumatized. And even the even the rescue has his political reverberations. I mean, just take us back in time a little bit too well.
Would you just heard?
Was the end of the book?
So I wrote it. It had not. It had not. The rubble had not been sifted, the pieces had not been put.
To get back together.
I wrote it before we knew exactly how all this was going to shake out. I certainly wrote it before we knew that it was going to generate the political anger that I mean, endless political anger. I mean one of the one of the consequences of that event is Trump. Of course, you can draw a line from that to Trump.
Sure mistrust of the one it is focused on the Wall Street people, and the other side is focused focuses at anger on the government having done this, having bailed bailed out the banks, that what the government did was far more defensible. I mean like they they're playing a very difficult hand and what they stopped was a depression and the federal the institutions worked. It's a bit like it's a bit like our inability to understand what happened
with COVID. That is, it is incredible that we were our paint was saved by.
The mrn A vaccines.
That was one of the most a miracle of modern science. We are so much better off because of it, and now we're not allowed to get a vaccine.
Well, I meantulated, and what I would say is with look at what you should have learned from the financial crisis is thank god we have an independent federal Reserve and a treasury that people trust, trust enough.
That they can walk into a room and calm everything down, be that that we can take the risk and every everybody believes it. We're moving towards a world where we don't have that, where we have a federal reserve, this hostage to a president, and and we have finances that have spun out of control, and nobody trusts trust us. So we've squandered the thing. We've attacked the thing that saved us. And what I wonder about I don't wonder like when the next financial crisis is going to happen,
because God knows. You know, anybody who tells you they know when it's going to happen, don't listen to them about anything, because you can't predict these and they're unpredictable. But you just it's like and you don't even and you know. All you know is that when it comes,
you're gonna be surprised by how it happened. It's probably not going to be AI, it's probably not gonna be what people are talking about, be something else, something that people know I'm not paying attention to, but whatever as a trigger. But when it comes, we are in a far weaker position to deal with it. That's the big thing, and it's because we didn't actually internalize the lesson of it.
You are going to land on the answer to the humans as your Oh they're not vehicles, they are the story.
Sorry, here's so I loved about this story. It's true. We don't to write a book unless I love the story and the people because loving the characters you can I can understand in all the books that you can disapprove of the characters, but you But what I what I don't understand is when you can't like them as charcter, like, wow, these are interesting people, and I mean you could I
left these guys. I left them exposed because I left I left it for the reader to decide how you feel about someone getting rich betting on the collapse of the society. Didn't actually bother me all that much, but it bothered a lot of other people. And I let that. I didn't cover for them. I didn't make a defense or or and I didn't make an assault. I left it. The best story is leave a hole for a reader to walk into and exercise their own discretion about what it means. And that was one of the.
Holes I left for the reader in this.
But the people, it isn't just gratuitous drawing of character. They get to the right answer because of who they are. That so you can't understand how they get to the right answer unless you understand who they are. So their character is organic to the story. It isn't just decoration, It isn't just entertainment. The characters become important and and so that's why you need to know them. That's why I need to know them. I need to know why
they were able to do what they did. And that makes it that's that's all of a sudden, when you're there with the reader, you're you're opening up that world, you're making it accessible. I learned this with I learned this with Liar's Poker, that if you can attach a reader to a character, you can take them anywhere. They
will forgive you anything. You can take them even to an explanation of a collateralized dead obligation, which no reader, no reader, if that's worse than a colonoscopy, no reader, no reader wants to be explained a collateralized They just don't.
Well, what's amazing is they take that to the movie version as well. You know, they they take.
This too, so I save Adam McKay. So the first episode of this podcast season that we've just dropping was Adam McKay, who the filmmaker, the co writer and director.
Of the movie. He's a genius, he is.
A special, special talent. So I thought, I thought that what you just heard, I didn't know what passages they were gonna pick. It was interesting for me to hear that, but I didn't And they didn't know that Danny and the and Porter were gonna be here.
So it's funny.
But I thought that was the end of the movie. I thought it was the end of the book. Those guys standing on the steps of us, sitting on the steps of Saint Patrick's cathedral, so seeing that people were good, they didn't know what happened to them McKay. And it is a very it's it's a cinematic moment, McKay. The end of the movie for Adam McKay was an editorial. It was like him telling the audience.
So it's him telling the audience what you just said about the political reverberations. It's him on the phone saying it was all it was all set up. They were always gonna bail them out.
They're alway gonna bail them out, and who were gonna do We're gonna blame the immigrants. We're gonna blame Yes, that it was incredibly prescient. That he was right in the movie. So the movie is five years after the book, so we've seen some things happen, right. That's only That's only the part of the reason why the movie is angrier than the book. The movie is angrier than the book also because Adam McKay's angrier just naturally more capable of anger than I am. I just look at the
world as a comedy. I just basically, which is funny, because I'm not that funny, you know it's but I'm watching it, and he is funny. He looks at the world in a darker way, and he is. He's just he's just more capable of the emotion. And I detach. I I it was the human folly that interested in me. I didn't get all worked up. I thought this is really interesting, but I'm not. I'm not going to like inflict the reader my anger or my even when I
really think about it, upon the reader. I'm just gonna tell a story.
What do you really think about it.
When I really think about.
It, this is a long conversation.
So I kind of I feel like I need a couch right now because to get what I really need. So I am really bothered by the by the way our society spun up a financial sector that is only partly useful, and it has got all this status and money and that I can understand ordinary people looking at it and thinking why, like, what are those what are those people doing that? Why don't I get some of that. I feel like a lot of our politics comes out of what happened on Wall Street. And and it isn't
just a crist crisis. It is the unfairness. And it bothers the hell out of me that half the class at Harvard, Princeton and Yale and so on think that they should go to work in finance. Like it's just half.
Do you think it's more than that?
It's kind of usually about it. Probably three quarters think they should, but half get jobs. I don't know it's that kind of thing, but it's uh, and are distracted from other purposes. It isn't that I think working on Wall Street is evil, That's not it. There are people who my characters, they belong on Wall Street. If they're really good at it, they should be there. The making garage, in my book, should all be in finance. Uh, And they love it. It's a it's a kind of calling
for them. It's the it's the casual young person who's not found a direction in life, but it might have some great other purpose, who uses an excuse not to not to ask the hard question WHI should I do with my life? That bothers the hell out of me? And so I think we have a kind of a cancer in our midst and and so it does bother me in but in a complicated way. My response to being bothered by it is not to scream to people or tell them where they did think. My response is
to find fun stories to tell. I mean, the amazing thing to me was this story that was available to me. Liar's Poker made me non grata on Wall Street. I couldn't like walk into office buildings on Wall Street. People were really angry when Liar's Poker came out. I was toxic. And so when I first see these banks starting to do dumb things, and I started to ask the question which I mentioned earlier, like how did they become the dumb money, because that wasn't the bank I left. The
bank guy left. If they were making a secret bet and asking you to take the other side of the bet, you are to run as fast as possible, the other direction that they and my job was actually sell those bets. So I knew, like the people who I was selling to, it was not going to work out well. And so something had happened between the time I left in this and it was I was intensely curious about that, and I thought, what a pity that I won't be able to go find out, because no one on Wall Street
will ever talk to me again. But I did think we'll give it a shot, and I started by calling. You know, I knew people who knew people who knew people traders Morgan, Stanley, Merrill, Lynch City Bank, Goldman and like who were who were in the who were either had done the horrible trades or were very near them. And to mysh astonishment, the response I get on the other line is I'll go have a beer with you. And it's off. It's off the record, and in the sense that you can know what I tell you, but
don't ever say we ever met. And and this happened to like half a dozen times. I thought, oh my god, someone's going to go have a beer with me. I was brought. I was kind of tickled, and I swear to you that each of these people were like six of them who had been responsible for making these bets said to me, the the reason I'm having this beer with you is you're the reason I'm in the business. I read Liar's Poker and I wanted to be It
made me want to be a trader. And about the third time, I thought, Jesus Christ, I created this crisis. That that that that I wrote this book. I wrote this book and all these people, I thinking that it was going to say, like, show people what Wall Street was so they could go, you know, do other things, and instead attracted all the wrong people under the trading floor.
And this is the result. But it also told me that, oh my god, because of Liar's Poker, now enough time has passed, I have access to the story like I can get to this. So that's that was the That was the very beginning of it for me.
Is part of it that at their core people want to be heard like people talk to you, because at their core, people want someone to listen to.
Their Why why do people talk to you?
I could?
I mean, look, you are a great interviewer. I was on your show and you were you were the streets above most people on TV. You're a great interviewer. Why why are you a great interviewer? I had a theory. I walked I walked off, and I had I had, and you have an audience that loves you. So so I walked on. I thought, oh my god, she listens. She's actually listening to what I'm saying stead of thinking
of the next question. She seems to have read the book, which is freakish on television, like like it doesn't happen, And so you're engaged. You're actually you're there for a reason. I don't know. I didn't ask you why you were there, but there was some reason you were there, and I felt it. The people I write about feel the same thing. There's a real I'm not my time is valuable. I'm here for a reason. I'm not here just I'm not here to stitch you up. I'm not here to do
something trivial. I want to write a great book, and I won't do it if it's not a great book. And I'm going to really try to understand you and your world, and that after a while becomes intoxicating. It's really because people don't get you know, people don't get
asked questions about themselves. They go home to their spouses and their spouses that don't want to hear about it right, like really, And it's so I find the most the strangest moment, the most unnatural moment in my relationship with the people I write about when I move into their lives is not the I'm moving into your life and tell me everything, because that happens very gradually, and we build a relationship and they come to sort of understand what I'm trying to do, and they let me just
be a fly on the wall.
Uh.
It's when I'm finished and I leave and it's like, hey, where are you. You're not coming in today, You're not coming in today, and it's like the book's done. It's like, oh, oh, that's right, you're writing a book, you know. It's that kind of thing. They kind of forget that. It just becomes a relationship for a while and then I move on and then there's this hard moment where sorry, I can't fly to New York to see you. You know, I got to do something else. So so I'm not
going to talk about the next book. But then the next book is about the collision between the Trump administration and the civil Service. And it's a real book, kind of like the fifth risk in the Who Is Government? It's a it's a it's a it's a big short like enterprise.
So you owe us.
Yeah, I think we kind of ran through time. I was just looking at that I do do I do? Go on? Uh So, so I got a calloscopy and you know, when you're in that, they give you a drug that you're there and you're not there, and thank god, you're kind of awaken. You're awake and you're not awake. And afterwards it was in Oakland. And afterwards the nurse comes in and I said, like, she said, you can kind of go, and I said, I'd love to say like goodbye to the doctor. And she said, I don't
think he wants to. He doesn't want to talk to you, and and and I said, like why he says he's kind of he's up. She said, he's like upset, like what you said. And I said, I don't remember what I said, like you know, and she said, what did I say? She said, she said, while you were while you were in the procedure, you look up at him and said, when you were a little boy, did you dream that this was what you would be doing in real life? Or did you want to or did you
want to be an astronaut? And I had to go apologize to him.
I mean, I, do you have a new gust eventrologist?
Well, this is true. I've now had too. If I had a second one very recently and I had to arrange.
Different to go to a different place, I'm not surprised. I'm not surprised.
All right, this was fun, This is amazing.
Keep writing forever. And I just want to wave to your real humans because I feel like, thanks for coming, thank you, thank you for letting him tell Tell the girl Thanky, thanks you for thanks thanks giving me, Thank you guys for coming.
I want to thank Nicole Wallace for interviewing me in Symphony Space, for hosting us, and you ought to go check out Nicole's new podcast. It's called The Best People and It's Great. Against the Rules is hosted by me Michael Lewis and produced by Lydia jen Kott and Catherine Gerardou. Our editor is Julia Barton. Our theme was composed by Nick Prittel, and our engineer is Hans Dale. She special thanks to Nicole Optenbosch, Jasmine Fustino, Pamela Lawrence, and the
rest of the Pushkin Audio Books team. To find more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts or wherever you listen to podcasts, And if you like to listen ad free and learn about other exclusive offerings, don't forget to sign up for a Pushkin Plus subscript at pushkin dot fm, Slash Plus or on our new Apple show page. And you can get the Big Short audiobook now at pushkin dot fm, slash Audiobooks, or wherever audiobooks are sold.
It's Jacob Goldstein. I'm the co host of a new show called Business History, and we're bringing you a clip right now from an episode we did about a mathematician named Jim Simon's. Simons wanted to take human emotions out of investing, and after a few early hiccups, including buying up all the potatoes in Maine, he created one of the greatest money machines in history. I really hope you like the clip. And if you want to hear more,
please check out the show. It's called Business History and it's available wherever you're listening.
Right now, they were doing what we would call today machine learning.
A machine learning is like, essentially, you build a system in a computer. You feeded a bunch of data, and the system sort of builds a map of the relationships in that data, and then with new data it can kind of interpolate or extrapolate and make guesses about what should come next.
And of course today we have.
An exciting, maybe misleading, confounding term for machine learning.
We call it AI.
Exactly right, right, this is still very basic machine learning, and the computer at the time keeps making mistakes that they didn't really understand. So, for instance, once the computer developed a taste for potatoes, main potatoes, the system kept buying main potato futures in the state of Maine, potato.
Potatoes, big harvest year, next year or whatever.
Yes, okay, until two thirds of the company's money was in potatoes. They were all in potatoes. And they got a call from the regulators, the.
CFTB a CFPP Commodity Futures Trading Commission.
Right, yeah, saying whoa who are you guys, Like, what are you doing over there? You have almost corner the market on potatoes. You have to sell And they ended up losing money on the trade because blown out on potatoes, they had stopped the computer. Whatever the computer's plan was, but you know, this was just one small weird thing. Simon and Baum were really kind of nervous about this whole thing. They had taken investors money, they didn't really
know if their system worked. And as the story gets told, they start to like second guess the computer and themselves, and they start to think, well, I have this intuition that gold's gonna go up because of the geopolitical situation, and they'd make some money on that, and then they'd lose some money on that, and so by doubting their
own system, it just wasn't really working. And at that point they're just Wall Street investors, right when the big computer trying to buy more potatoes and the man won't let them buy potatoes