On with Kara Swisher - Money, Hubris and Jeffrey Epstein: The Fall of Leon Black, w/ William Cohan

Episode Date: August 31, 2026

In his new book, “Money To Burn,” author and Puck journalist William Cohan traces the rise and fall of one of Wall Street’s most towering modern figures: billionaire Leon Black. His private equity and investment firm, Apollo, changed Wall Street, making Black enormously rich. He reached the highest rungs of New York society, but his ties to convicted sex criminal Jeffrey Epstein ultimately took him down. Kara and Bill talk about how Black and Apollo ushered in a "new Wall Street" and the nature of Black's relationship with Epstein, which continued for almost a decade after Epstein's 2008 conviction for soliciting prostitution from a minor. They also break down some of the latest headlines in business and finance, including Meta’s $17 billion settlement and President Trump’s escalating trade war with Canada. Questions? Comments? Email us at [e-mail] or find us on YouTube, Instagram, TikTok, Threads, and Bluesky @onwithkaraswisher.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

You know, we're in one of those periods of time, like we were in 2006, 2007, when anybody who touched a mortgage made a shitload of money off of it, now we're in a period of time where anything you do on Wall Street, stocks, bonds, private credit, private equity, regular loans. You know, people are just making money hand over FISC. Hi, everyone, from New York Magazine and the Vox Media Podcast Network. This is on with Kara Swisher, and I'm Kara Swisher. The inner workings of Wall Street are notoriously hard to parse.

The jargon, the complex math, the abstract concepts, made it feel removed from our everyday lives. That is, until things go terribly wrong. But few people do a better job at breaking it all down than author and puck journalist William Cohen. Bill Cohen, to me, and to many people, his latest book, Money to Burn, is about one of Wall Street's most towering figures

of the last few decades, billionaire Leon Black. With his private equity and investment firm Apollo, Black rode the tides of a changing Wall Street to immense personal fortune. He amassed a multi-billion-dollar private art collection that includes work by Van Gogh, Picasso, and Cizan. But Black's ties to convicted sex criminal, Jeffrey Epstein ultimately forced him out of a company he built. Black's story now feels like a familiar one, that of a powerful individual with a huge appetite for risk, who was willing to look past Epstein's behavior when there was money to be made.

I really love talking to Bill. We talk about all manner of things about Wall Street. Right now, Wall Street's on a real high, but there's all these warning signs of the bond markets, tariffs, the war in Iran. And it's really important to link what's happening on Wall Street, including this incredible risk-taking, especially around AI, and to what it means for regular people. All right, let's get into my conversation with Bill Cohen.

Our expert question comes from Bethany McLean, a contributing editor at Vanity Fair, an author of the book, The Smartest Guys in the Room, The Amazing Rise, and Scandalous Fall of Enron. So, stick around. Support for this show comes from Odoo. Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow none of them ever talk to each other. That's where Odu comes in, an all-in-one business management software that brings every part of your business together,

from sales and accounting to inventory and marketing, all in one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no spreadsheets. Stop managing software and start managing your business with one unified system. Try it today for free at Odu.com slash Kara. That's O-D-O-O-O-O-com slash Kara. Bail, thanks for coming back on on. Kara is always a pleasure to be with you. Thank you.

Always a pleasure. You are my guru of Wall Street, just so you know. We're going to talk about a lot of things. But I want to start with your new book about the rise and fall of Leon Black. A very fat book, by the way. I was with it last night, hugging it all night. You start off as an investment beggar for switching to journalism for people who don't know.

So put Black in context for people. Why should we care about him and what sets them apart from others who made, you know, billions in finance? There's so many of these people. Explain him for people to understand. Yeah, so obviously you're right. Private equity billionaires or 100 millionaires or kind of a dime a dozen these days. I don't think there's a better business you could have been in that is both legal and, and can make you as much money as private equity did for the last 40 years.

It's kind of hit on more difficult times these days. But Leon was always a different breed, and he built Apollo to be a different breed than just your run-of-the-mill private equity firm that used other people's money, borrowed money, and took some equity from institutional investors, and then took a company private or bought a division of a public.

company or whatever. Apollo was always set up to be in a position to buy other parts of the capital structure and not just the equity. And what I mean by that is if bonds were trading at a distress level, they could buy those bonds, hope that the price of the bonds went up and if they did great. If those bonds, however, went into bankruptcy or defaulted or were even more distressed, they could convert those bonds into equity and get control of the company that way. And they did that, repeatedly. No one else was doing that when Apollo was founded in 1990. And of course, they all came out of Drexelkera, which means they were all part of the Mike Milken junk bond machines. So they knew where all the distressed bonds were. They had underwritten the bonds to begin with. And now, in many cases,

they were buying them back at a discount and getting control of the companies by doing that. My favorite example, of course, is like Vale, Vale, Mountain, Vail resorts. You know, Leon advised George Gillette in buying Vail and other. assets that he owned, using Milken's junk bonds to do it, and then the company ran into trouble. The junk bonds traded down. Leon bought the bonds at a discount, converted it to equity, and ended up with Vail Resorts, and made a fortune. So you talked about Black's Apollo and why it was different, but what about Black? What set him apart from the rest of Wall Street? I mean, I just think he thought out of the box.

He didn't want to be like the rest of Wall Street. I mean, obviously he went to Drexel instead of a traditional Wall Street bank. He was head of M&A there. When Drexel imploded, he started Apollo as a different form of private equity firm to have ultimate flexibility to invest in whatever securities he wanted to invest in. And everyone else was sort of just using other people's money to buy companies and take them private and then flip them for sale or go to public again. Leon was busy buying the distressed securities of companies that he had once. financed or been part of the financing of at Drexel and then converting that debt to equity to own the company. I mean, no one else was doing that. Right. So innovative flimflammer is what

you're saying to me. I'm teasing. Certainly innovative. And, you know, obviously it's all legal. You know, you don't like these laws. You know what I mean? He's like he made those deals and then he went and took advantage of the deals. And he got a lot of criticism for that. Yeah. You know, the amazing thing is he was like incredible escape artist too because Drexel went down and he didn't get in trouble. And then when they bought executive life, half of credit LienA went down and he escaped out of that while making a fortune because he bought $6 billion worth of first executive junk bonds for 50 cents on the dollar. And then, you know, most of those bonds traded up. A lot of them were converted to equity and he bought the companies, took the

companies and made a fortune owning the companies like we talked about with Vail. But he was an escape artist until he got caught up with Epstein, and he got stuck with the Epstein paper. So while Black was getting his MBA at Harvard, his father, Eli, is running United Brands, very famous, huge international conglomerate that's right in the process of unraveling. Eli dies by suicide in a very public way, and Leon experiences its trauma. He's never shown much interest in business before all this, and yet he goes into finance anyway. Talk a little bit about that, because he is getting his MBA at Harvard. Right, he didn't want to go get his MBA at Harvard,

you know, sort of like my father wanted me to get an MBA, and I did, even though I was a journalist and didn't want to do it. But I did. He was a philosophy major at Dartmouth, of all places. You know, Jewish kid from Park Avenue going to Dartmouth, okay. That's not that usual. His thesis at Dartmouth was incredibly interesting, intellectual, having nothing to do with business, more with art and philosophy and literature.

So he goes to Harvard Business School. His father jumps out of the Pan Am building. Explain why he did this. It has to do with tariffs, Kara, believe it or not. I know we talk about tariffs today a lot. United Brands was the largest importer of bananas from Latin America and South America. We don't grow bananas in this country. Hello.

So we have to import them. And the Latin American countries, Central American countries, started putting tariffs on the bananas that were imported into this. country by United Brands, pretty much trashing United Brands income statement. Right. That's when Leon's father and the other executives, some other executives there, thought, like, how can we make these tariffs go away? How about a little bachish to the Honduran finance minister?

And that's what happened. You know, small potatoes by our standards today, but big scandal involving, you know, the discovery that Leon's father in effect, who is the CEO of United Brands, it okayed the payment of a bribe to the Honduras finance minister. And, you know, he was a very highly respected Park Avenue CEO and conglomerator. Now he's got up in a scandal. And Leon was in his second year at Harvard Business School. His mother was an artist.

His aunt was an art dealer. He had a sister who was a teacher. Suddenly he became like the guy who had to be the breadwinner for this family. And a lot of their money was lost because it was tied up in, United Brand's stock, which naturally plummeted upon the news of this getting out. So that's why he went into finance. He needed to make money. He needed to make money. He was going to go into like film or something, but he had gotten an offer from Goldman Sachs, which he turned down. I don't know, all these guys turned down offers of Goldman Sachs.

I don't know how they did that back then and decided to opt to go to Drexel instead. And he had no aptitude for it per se. But went. Oh, but went. So explain Drexel. I love to Connie Brock's book about Drexel, but, you know, Michael Milken, and it was sort of the outliers place. He was known as a junk bond king. He ultimately destroys Drexlund is destroyed by it. He pleads guilty to securities fraud and conspiracy charges sent to prison by, I think, Rudy Giuliani. Talk a little bit about this

experience here, because that was sort of the go-go place, but it was the outsiders to the white shoe firms. Or correct? Absolutely. They were the renegades. You know, Mike Milken, before he did go to prison, before he pled guilty to securities violations after saying he wouldn't, but he did. And then he's since been pardoned, of course, by Trump, created the junk bond market, which is a hugely important innovation. It's huge a market today,

but he conceived of it and Drexel pulled it off that gave them incredible power, both financing all sorts of companies that couldn't get access to capital in the past. I mean, basically, we wouldn't have a cellular, telephone industry today without Mike Milken and his junk bonds or cable industry. And those are just two small examples. It took big risks for big rewards, essentially. Right. He understood that investors could make more money buying junk bonds than they could the bonds of investment

grade companies. I won't bore your listeners with why. But they couldn't, they wouldn't let them in, like these companies, nor Michael Milken, right? No. So he financed the companies that other people wouldn't finance. And he also financed Raiders and gave them the money like Carl Icon to buy companies they otherwise wouldn't be able to afford. One of Leon's great innovations was the so-called highly confident letter, where Drexel would issue a highly confident letter saying it was highly confident it could raise the money for Carl Icon to buy, you know, some company that he wanted to buy that he couldn't afford. And it was really just a puff of smoke and a cloud of dust.

There was nothing really behind it, but given Milken's prowess was raising capital for all sorts of companies, it worked. So what did he learn from working with him and then the implosion, which he escaped relatively unscathed? Yes. He was head of M&A at Drexel. Right. Why did he get good at it?

He turned out to be good at it. Well, why is he good at it? Because he's incredibly smart, incredibly insightful. and savvy. And, you know, he can be good with clients. I mean, my experience is that on Wall Street, having worked there for close to 20 years, was that there are guys who can just turn it on with clients and just have the meeting out of the palm of their hand, even though they seem like rough around their edges or unpleasant to everybody else who works for them. With clients, they can be mesmerizing. And Leon was one of those guys. And he was one of those guys. And he

He brought in a lot of big business. He brought out a lot of deals, you know, based on largely Milken's clients that he had financed and rose to the ranks and was flying high. And then Giuliani, as you said, came after Milken. And, you know, despite he and Black have remained close friends. What was the impact on him when the implosion happened? I mean, I think he told me he was devastated, obviously. I mean, the people who worked at Drexel loved working at Drexel. So, I mean, they were a money-making machine.

Don't forget, Mike Milking was paid $550 million, $550 million for an investment banker in 1987 was unheard of. So Leon was getting fabulously rich, being head of M&A. So all that came crashing down after Milken pled guilty and left the firm. And then, you know, the firm, of course, had a run on the bank in early 1990 and basically was liquidated. And he goes to found his own firm. Apollo, which you call the new Wall Street. Well, the innovations that I talk about in the book, in the last part of the book, since 2008, Mark Rowan, who became the CEO of Apollo in 2021, you know, essentially the creator, just like Milken was the creator of the junk bond market, Mark Rowan is the creator and the genius pretty much behind the president. private credit, the explosion of the private credit market in this country. And that's how Wall Street

has been changing. And that's why the subtitle includes the idea of a new Wall Street. It wasn't because of what Apollo was doing in 1990 in 2008 so much, but really from 2008 to now 18 years later. And this is private credit to finance things, being a bank themselves, essentially. That's right, in effect. But without being a depository institution, without taking deposits from you and me, they get their capital from this insurance company they created called Athene, which provides annuities to retired or retiring people like me, Karen, not you, who maybe want to lock in a fixed rate of return for X number of years. So their money is sort of long-term capital that they then use to provide long-term financing

to all sorts of companies. Talk about, were the changes of the new ones? Wall Street, good for everyday people and black himself? Well, Leon, of course, is now out of the firm. He remains the largest shareholder, so he cares immensely what Apollo is doing. And basically, Mark Rowan has created this private credit juggernaut. They have about a trillion dollars of assets under management now, 850 billion of which are private credit. So he's created a juggernaut. And, of course, the rest of Wall Street, just like with Milken, creating the junk barn market and the rest of Wall Street catching up, the rest of Wall Street, the alternative asset managers on Wall Street, the Blackstones, the KKRs, the Brookfields, the TPGs, have copied what Apollo is doing and created a huge business out of it. And you will remember over probably the last nine months or so, a lot of people have been wondering whether there's a crack, in the dam of the private equity tsunami, so to speak, mixing all sorts of metaphors there,

and whether or not it's a bubble or whether or not it's going to cause the next financial crisis and, you know, a lot of retail-type investors have invested in these private credit funds, wanted to get their money out, and didn't realize they were limited to only 5% of their money and began making a lot of noise. But I think the people like Mark Rowan, who are the mad scientists behind private credit, are basically saying this is overblown, you guys are overreacting, and everybody just calmed down. But is it good for people? It's good for, you know, you put your money in these markets.

And it's, you know, the way you described it is kind of like the Hotel California. You can check in, but you just can't check out. Yeah, are these things good for average Americans? Yeah, it's great for Apollo. Okay, we can stipulate that. It's probably good for the borrowers, although their capital is not cheap, but they can get the capital.

It's probably more flexible capital than bank capital. So that's probably good for the borrowers, by and large. There haven't been that many defaults. Is it good for the investors who invest in private credit? Well, Apollo, of course, invests about 20%, takes about 20% of each of the deals it puts together. So I think they wouldn't do that if those were, if that was ugly piece of paper.

So I think it's probably well-priced for the investors. Here's the risk care comes with the people who are getting the annuities from Athene. Like their promise, say, 5% a year on their money for seven or 10 years. And Apollo was taking that money and investing it, you know, lending it out at 10 or 11% and then probably using some leverage on top of that. You know, the argument has been made, and I explore this in the book, about whether or not really what Apollo is just created is a different form of a bank. In other words, they own the annuity holders this 5% a year.

If somehow they don't pay that, they're in big trouble. The whole kit and caboodle is in big trouble. Or if the annuity holders, for whatever reason, even though their money is locked up for seven to ten years, say, hey, I don't care about that. I want my money out now. They can't go to the ATM machine like they could at Silicon Valley Bank, but they can get their money out. It maybe comes to a penalty.

But if enough of them clamber for that money back, you know, the assets are tied up for seven to ten years. There could be a problem. We'll be back in a minute. Support for the show comes from Odu. Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other? One for sales, another for inventory, a separate one for accounting.

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so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you? Try O-D-O-O-D-O-O-com. That's O-D-O-O-O-O-O-com. So Apollo turns Black into a billionaire a few times over. He amasses a staggering art collection. He sits on Momus Board of Trustees. He has a trophy homes, a yacht, a jet.

But one unnamed Wall Street veteran who spoke was said Black's weakness was hubris. That could be said about a lot. of people on Wall Street. Was his hubris his big problem? Again, a lot of these people have that. So, you know, my thing with Leon and I spent many, many hours talking to him and he doesn't talk to many people in the press is Leon, like, you're this incredibly smart guy. You've created Apollo. Your thesis that Dartmouth was mind-blowing. You're generally credited as being one of the smartest guys on Wall Street. There was a cover story in Business Week, you know, with one word title calling you ruthless. So your feet.

and envied and people are in awe of you a lot of the time. How could you do something so stupid, Leon, to get involved with Jeffrey Epstein or to have an affair outside of your marriage that you agree to pay this woman $21 million and signed an NDA and then she blows it up? I mean...

Right, right. You know, I asked him that many times in many different ways, and he basically said things like life is complicated, I'm also the guy who spent, you know, $50 million each for two small Raphael drawings, $130 million for an Edward Munk pastel. So, I mean, and part of his answer was, look, there were a lot of people,

wasn't just me with Jeffrey Epstein, we know that. Well, that's no excuse. No, but it's one that he uses. And there are, you know, as he pointed out to me, hundreds of rich guys within the one-mile zip code area of where we were sitting and having this conversation who've had affairs outside of their marriage and who got the women to sign NDAs. And, you know, by the way, I would know many of them, he told me. And this is, you know, sort of par for the course.

Again, not a great excuse. So for you know Apollo Weather's various missteps and scandals over the years, but eventually takes Blackdown is his relationship, as you know, to Jeffrey Epstein. His name comes up more than 8,000 times in the Epstein file, so that's kind of a dumb excuse. Now, he denies any knowledge of Epstein's crime, to be fair, although he did remain involved him long after his 2008 conviction, Epstein's first-listing prostitution from a minor. I think one of these things people struggle to understand is how Epstein got access to people like Black and Bill Gates and Bill Clinton. Talk about it, because if this is one of the smartest people

I know, how is he so stupid? You know, when I first brought up Epstein, we were having lunch in his office, and he went over to his jacket pocket and pulled out a handwritten list of all the people who were involved with Epstein, you know, many of whom you just cited. What was he doing for all those people? That remains one of the biggest mysteries, right? You know, for Leon, of course, he asked for, and Apollo commissioned what became known as the Decker report, which, which was a deep dive into Leon's relationship with Epstein. He said he asked for that because he, quote, unquote, knew he had done nothing wrong. The Deckerre Report did not find any wrongdoing. They found that he paid him $158 million. Yeah, you know, let me be clear. Black insists the money. He noted in this book was for legitimate business dealings related to tax and state advice. He even told you, quote, I've never been that sophisticated tax-wise. They're always dumb when they need to be. More shockingly, he also told you you never added up how much he had paid Epstein.

How do you square that with his financial acumen and making claims like these? Because it's obviously he hurt his reputation, I think, probably fatally. Oh, yeah, because no one understands how a guy who could be as clever and savvy and his sharp elbowed and is sophisticated and is successful on Wall Street doing deals could make himself vulnerable to this guy or could have created a tax structure with a Wall Street lawyers that ended up. up not working, and then he has to go to Jeffrey Epstein, who's not even a lawyer, who's an autodidact, and find a solution that actually worked. And Leon and I spent a lot of time on this, and I talked to many lawyers who were involved

in this. You know, he did have a problem with his tax and the state planning, even though it was done by a very sophisticated lawyer who was supposedly an expert in this. He went to Epstein. Epstein looks at the documents. He was no tax and estate expert, and I explained it in the book, he came up with a way to have the whole document set redrafted in a new way to eliminate the potential tax liability by Leon, in effect, having been given $400 million that he wasn't entitled to, giving that back,

and that allowed for a sufficient consideration for the documents to be reaffirmative. redrafted without this problem and then ended up savingly on $2 billion. And, you know, it has never been challenged by the IRS. I know Ron Wyden talks about it all the time and thinks there must be something wrong with it. But Epstein's solution in just this case was very clever, very insightful, and then vetted by, you know, the Paul Weiss's, the Sullivan and Cromwells, etc. And they all basically signed off on it. So, and I've never been able. I mean, I looked pretty hard, Kara, as you would expect me to do,

to see whether there were any flaws in all that, that party line. And, you know, I have not been able to, you know, challenge it. So he had a good idea. But how did Black justify why he continued to work with Epstein for roughly a decade after his initial guilty plea? I mean, just that he was saving him a lot of money? Like, there's a lot of smart people that don't sleep with minors. Right.

So here's the justification from Leon, and I lay it out in the book, of why he kept working with Epstein even after his guilty plea for having sex with a minor. He said, one, that Epstein told him that the girl slash woman showed him an ID card that showed she was older than 18. Yeah, the old excuse. Of course, the old excuse. Okay. So Leon said, okay, that was kind of like good enough for me. Number two is he thought, okay, he paid his penalty, even though we now know it was incredibly lenient and kind of a joke. He paid his penalty with society, and I believe in giving people second chances. And then he trots out to me, and maybe it's true. You know, he gave Martha Stewart

a second chance. He gave Al Taubman a second chance. He gave Sam Waxel a second chance, all, you know, either convicted or pled guilty to crimes. You know, he's given Mike Milken a second chance and a third chance and a fifth chance. So he believes in, you know, this is what he told me. I believe in giving these people second chances. They're my friends. I'll give them second chances. I didn't know about all of this criminal activity well beyond the having sex with the underage girl. So I didn't know about that. So he was a friend of mine. He helped me solve this tax problem. He then, you know, wormed his way into Elysium, his family office. He helped me buy boats and planes and artwork and sell them all in tax-efficient manners. He did not have, he had

just like an agreement to work together. He did not have any written contract with all the other things that Epstein was doing for him over many other years. And then when the Decker people totaled it up and it added up to $158 million, that was apparently news to Leon because he had never added it up before. So he just was paying the bill. So as more details emerge about Black's tie-stips, seeing, you know, as you noted, he asked Paul's board to hire outside counsel and review the relationship and the report exonerated him of any wrongdoing. But, and this is a big but you didn't by the review findings, and I got to read, which you wrote at the time in Vanity Fair, nice try, Leon, you must think we're pretty stupid, gullible, or insane to believe the tale you spun to the investigating firm.

You sat down with him multiple times through this book. What would you say now? I still think that people are incredulous about the amount of money he paid to Jeffrey Epstein and the reason for that. And I remain incredulous, and I kind of asked him myself, and he knows. He knows he read the Vanity Fair thing I wrote. and he knows I'm skeptical, it is still an incredible amount of money. You know, one of the two main parties to this whole matter is dead. So, you know, absent any evidence to the contrary in the 3 million files, and I've been through a lot of them, especially when it involved Leon, and, you know, Epstein ranted against him in these crazy emails, Kera,

and then Leon never responded to the emails. To Epstein. To Epstein, that's right. And so, you know, despite everybody being incredulous, and people are, people are still incredulous, as am I, basically. But, you know, I don't have any evidence to refute what he is saying. Why do you think he did it? If it was not, he helped me with my taxes. No, he helped me with all sorts of things.

It wasn't just the taxes. He helped me with all sorts of things. Right. He's a smart guy with these things. You know, Leon, you know, I get it. You know, you start talking, I don't know whether you've done your own estate planning, but when you start doing that, you know, it becomes very bizarre, and you can't even figure out what you've done even at the moment you leave the office of the lawyer

who you've just been working with. I'm pretty clear on what I've done, actually. Okay, well, you're smarter than the average bear. No, but it's not that. I don't have that much money, but did you use change at all after you worked on this book with him? I mean, a lot of people have a lot of theory. as to why he did this. And obviously, Les Wexner,

there's a whole gang of theories around him, including his... And Glendoubin, and you name it. I mean, there are plenty of people who have been unexplored. I mean, Leon has been explored more than most people. Decker did do this report. I obviously pressed him on this repeatedly.

We talked about it at length and on the record. I remain incredulous that he would pay $158 million to this guy and not realize it, and that there was not kind of like... like more to it, but I don't have any evidence that there was. Now, he obviously had women on the side, and he got in trouble with one of them, and maybe others. There's been other allegations made against him, not just, you know, Gagneva, but two other

women as well. And the lawsuits have been thrown out, basically. Right. So when and why did their relationship end with Epstein? Because if you read these insane emails from this guy, this verbal diarrhea, and late at night, he was just constantly harassing Leon for more money. And as Leon said, he thought that the advice and what he was paying for with Epstein was tax deductible. It turned out not to be tax deductible. So he thought he was paying with $0.60. He wasn't. He was paying

with $100.00. So I think he just got pissed off at Epstein with his relentless, you know, desire for more and more money. And he said, that's it. You're out of here. So why do you think Black agreed to be interviewed for this book, given that you basically call him a liar in the pages of Medity Fair? Maybe because he knew I was going to write the book anyway. He wanted to get his story out there. I've chronicled other Wall Street firms. I was a Wall Street banker.

He reached out to me, Kara. I didn't even get a chance to call him up. He reached out to me and said, you're writing this book. I assume you'll want to talk to me. And I said, of course. He couldn't have been more open with his time. And on the record, relenting.

endlessly on the record. You know, you know with Wall Street types. They don't like to be on the record. They don't like to be on the record. They'll tell you everything off the record. Right. Was he trying to prove something? What motivated him? I think he would like a Milken-like redemption if you could get one. I don't think he's going to get one. Because, I mean, Milken played guilty to crimes that he was later pardoned for. But that's a whole other thing. Don't get me started. But, you know, he had prostate cancer and he is obviously become, been very, very helpful to that whole cancer drive. He's also, Milken is probably smarter with the media than Leon has been, right? They don't question a thing that he says, you know. He won't

even talk to me because I don't suck at that teeth. Leon has kept most of the media standoffish, and rightly so, they've been cruel to him. Because the minute Epstein is mentioned, you know, Gates is a similar way, right? We don't know what he did. Larry Summers, all of them. So in the wake of revelations about Epstein and also revelations they had years-long extramarital, the Russian woman paid her millions of dollars to stay quiet about it. I love how people are so mad. I'm like, of course you'd pay her to stay quiet. What else would you do, like if you wanted them to be quiet?

But Black resigned as CEO of Apollo and as chairman of Apollo's board in March of 2021. And yet, he hasn't exactly been canceled. He's still on the board of trustees at MoMA. He still has ties to the Met. what's been the impact on him? Because Epstein stays on people. I'm thinking of Gates, Clinton, Summers, as you said. He had to leave certain things.

And, you know, Gates is trying to reemerge, right? He is. Comments about AI. Scary! Right. Leon has stuck on him a lot longer than pretty much everyone else. The sum of money he paid him, as we discussed, is much higher than anybody else.

large margin. There was the Decker report, which is a public report. He's got Ron Wyden. He's in the files a lot. He's in the files a lot. But again, never answering the crazy things and never corresponding. I mean, if Larry Summers had just not responded, he would not have been canceled. Okay? So Larry, you blew that. And then asking him for dating advice. Yes, yes. Nice one, Larry. Classy. Keep it classy, Larry. Yep. Don't ever change. But, you know, Leon has Ron. Ron Wyden crawling up his ass. He's now got Comer crawling up his ass. He's supposed to go back and give...

Let me just for people who don't know. The Epstein files were released by the DOJ earliest year. Some of them contained even more disturbing allegations. Again, Black, including multiple allegations of assault. We're not going to share the details, but Black strongly denies the substance of all of them. And as you said, the House Oversight Committee and the Senate Finance Committee have been looking into Black as part of their EPSCIN investigations. So what is the biggest question that reigns? unanswered about his involvement. Well, you know, Wyden is just skeptical about the whole 158 and what it was for. By the way, he says it's 170, not 158. I'm not sure where he gets that number, but he's sticking with it. He's been sort of, quote, unquote, exploring how billionaires don't pay their fair share of taxes, and he thinks that Leon is, you know, Exhibit A. So that's Wyden.

Wyden is relentless. And Comer now is after Leon's NDAs. and he's thinking that, you know, he must have been involved, you know, gotten advice from Epstein on the NDAs. He's threatening now to hold Leon in contempt of Congress if Leon doesn't cough up these NDAs, you know, of which there may not be others besides the ones. He obviously shared the Gagneva one because that was public because of lawsuits. He's offered to share a second one. I don't know what that is. But Comer thinks there are all these other ones.

And meanwhile, he, you know, with an NDA, you know, know, that means two people signed it, right? At least. And if Leon unilaterally gives it to Comer without permission from the other person who signed it, that's breaking that contract. So he can't do that. So he's at a bit of a standoff with Comer. Comer is, I think, also wants to run for governor of Kentucky. And this is like maybe his political stepping stone for that. He's threatened Leon with contempt of Congress. He's supposed to appear in September 3rd for an involvement. voluntary deposition. So the two of them were really at loggerheads at the moment, literally in real time. Where does this leave him?

Leon? Yeah. He's still the largest shareholder in Apollo. He told me he has more than a billion dollars in his philanthropy to give away, and he struggles to give it away because there's the Leon Black Taint. His art collection is astounding. Absolutely one of the most incredible I've ever seen. He's on GLP's, so he's lost Wade. He looks better. He wears Rayban sunglasses like somebody I know on this call when he's striding the halls of Congress to go to his testimony. He hangs out, you know, in the Hamptons. He's got his private jet flies around the world.

I mean, you know, his son, Ben, is in the Trump administration. One of his other sons works at Apollo. I mean, you could be worse. He's worth $15 billion. So what did you take away from this book? Why him? I love writing these incredible stories about these incredible characters. So that's one thing. I mean, I just love to get into who they are and their personalities

and why they've done what they've done and all the supporting cast. So that was, you know, I just knew it was a great story, Kara. And then another big part of it was, as we alluded to before, was how Apollo has changed Wall Street because of what Mark Rowan is done with Athene and this whole private credit panana. And we don't really know how it's going to play out yet. And a lot of people are very worried that it's going to lead to the next financial crisis. So, for For those two reasons, I wanted to write the book. I got lucky that this whole Epstein blew up, and there was three million files that I never even thought I'd have access to, many of which involved Leon. So you were working on it before this, right? Correct.

Oh, yeah. Has Leon read this book? I think he's just getting his copy today. How do you think he comes off? Fair and balanced. I hate those words because they're Fox News-laden, but he's had his say. He explains it all in detail. You laid out the case.

Laid out the case. The other side of it is dead. So this might stand for a while until the other three million files come out, which will probably be a never thing. Well, no. Never say never. We'll be back in a minute. Support for this show comes from Odu. There's an endless supply of software out there that promises to streamline your workflow.

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That's O-D-O-O-O-O-com. So other business news, let's get to some other stories because you and I text a lot and talk about different things that are happening. Now, Wall Street is still very bullish on artificial intelligence despite ongoing fears of a bubble. All of the Wall Street is buoyed by AI and tech, essentially. Anthropic is preparing to go public soon and hoping to beat SpaceX's record-breaking IPO just a few months ago, though not a particularly successful IPO for people who got in right at the start, except the very start did great.

Anthropic is also expected to tell investors it sees more than $30 trillion in potential revenue and eye-popping figure. Talk a little bit about what's going on with Wall Street and AI right now. evaluation bubble of epic proportions, epic proportions, absolutely insane. And if people don't get sobered up by that SpaceX IPO, then I can't help them at this point. I mean, now it's creating valuable infrastructure that we will need for this. I mean, AI is not going away. Just like the Internet wasn't going away, we needed the infrastructure, and that every company that was partied that infrastructure in building it went bankrupt, but we still use the infrastructure.

The same thing is happening, in effect. Now, way too much capital, as you and Scott have talked about many times, is being invested in this area at ridiculous valuations. So, I mean, people are just going to lose a lot of money, and they never learn. They keep making the same mistakes over and over and over again. You know, and I'm old enough now where I've lived through 10 of these mistakes, and, you know, they just have to learn on their own.

They do. Lead the horse to water. You can't make them drink. So how realistic is the $30 trillion in potential revenues? Sounds like you think not realistic. Someone there brought it to me. And I just said, get the fuck out of here. I mean, how realistic are data centers on the moon?

Right, right. Probably more realistic than this. But inevitably, as you noted, there'll be a market correction. There always is. It doesn't mean it will burst necessarily. But even former Golden Sacks CEO, Lloyd Blank Fine, has been sounding alarm about the, quote, unlimited appetite for exposure to positive AI revenue story.

What if anything could prompt a quote? horse correction. And what would that look like when you're thinking about it? Because we all know it's coming. You know, people always think they know what's going to be the trigger for a correction. Very few people know. It comes out of left field. It's probably the last thing you expect. But what always is the same, Kara, is that it triggers a loss of confidence. And since Wall Street is nothing but a confidence game, once that confidence is lost in this euphoric concept, which at the moment happens to be AI and data centers and ridiculous valuations, then it's just like, oh, my God, SpaceX is a $30 stock suddenly, and what were we ever thinking by valuing it at $225 a share? I mean, hindsight is

2020. Investors never figure it out, you know, and now there's this move to get people, be allowed people that when they're 401Ks and pensions to invest in private equity and private credit and all these crazy things. Please don't do it, people. I know this is not investment advice. Never is with me. But please, don't fall for the shiny object yet again. So what are the big signals at this moment?

Everyone's always talking about red flags, big signals, flashing red, you know. I mean, it's going to be some sort of revenue miss or profit miss at Navidia or Anthropic or SpaceX. Turns out to be a big old dot. I'm telling you, if SpaceX goes to $30, $30.00. a share, as some people have predicted, you know, then that's going to be the wake-up call. Frankly, if, I think there could be repercussions if, you know, our friends at Paramount and Warner Brothers, if that deal falls apart. Because if that deal falls apart, $31 a share plus whatever ticking fee goes away, and Warner Brothers becomes a $10 stock?

Yeah, yes, right. And Paramount Skydance becomes a $1.00. stock and Larry Ellison is out billions, not that he may care. Oracle keep falling. I mean, it's going to add up. It's like a string of whatever the opposite of string of pearls is, a string of calamities. Right, right. Well, speaking of that, just one of the people trying to get out of it in the stock has been, people consider undervalued. Meta has also agreed to pay $17 billion to settle a landmark teen, social media addiction case. Other cases against Meta are still playing out in the courts. There's lots of them. Talk about why they settled. And, you know, just for,

people don't know. The same Attorney General who's plaguing Paramount was right in the middle of this case. He had a great case. He's a big win for him. Big win for him. I have warned the Paramount people. This guy is really smart and he has the leverage on them. So talk a little bit about this. Why Meta settled. I get it. They had to. Because they were going to lose. They were going to lose. And it could have been hundreds of billions of dollars. 17 billion sounds cheap to me. Yeah. Well, it's a lot of money. It's not a little. Yes. It's not a little. It's not a little. It's not a little. little, but it's a rounding error on their market cap. Right. And now I don't know what the stock is doing today. It's probably trading up with the settlement. So, you know, Mark Zuckerberg slips the noose again.

Right. So for now. For now. And by the way, it was criminal what he was doing to our children. Yes, 100%. So explain why they did it and why did Bonta and the others settle from your perspective and what it means for their stock. Why they settled?

Because why not? I mean, they got 17 billion. We're talking about it as a big win politically and financially for Bonta. It gives him, I think, even more power over the Ellison's and the peace guy's situation. Same guy. And so this guy is riding high. And, you know, if, you know, he could have let it go to the jury and he could have won more money and maybe gotten even a bigger victory. Could have lost.

I don't know why you would have lost. Maybe the jury would have awarded less. So sometimes, you know, you can't let the perfect be the enemy of the good. And, you know, he comes, we're talking, we're singing his praises now. Right, right. So what does that mean for the power of these AGs on the companies? Because just for people that know, Rob Bonta is the California Attorney General. And he's pushing back against the governor and the mayor of Los Angeles.

And he's been very vocal about the Paramount deal this week, saying they're basically leaking liars. I think that's pretty much what he said. But what happens now, because this is a lot. is not just one case. There's dozens. And many people feel this is the cigarette moment for these companies. And it should be, because those crimes are similar. I mean, I hope this leads to a dramatic change in the way that algorithm works. And not just that algorithm, frankly, all of these crazy algorithms. I'm so sick of what I see in my X-Feed, and I don't know how to get out of it. You can stop using it. I know. I know. You've told me to do that many times. And

But it's my only social media. Go on thread. So then you're still with Mark Zuckerberg. I know. I'm a Luddite. So I hope it leads to serious reform and it's long overdue. So we also appear to be careening towards a devastating trade war with Canada. Canada announced it will propose retaliatory tariffs on hundreds of U.S. products, including steel and appliances.

And Trump is threatening even higher taxes on Canadian exports right now. The market hasn't reacted too much to the escalating threats. What do you make of that? And is it because they assume, talk? Trump always chickens out, or what's happening? How do you assess right now his grip on the economy, if it is indeed a grip? Look, Trump and Mark Carney don't get along, and I love Mark Carney for it because he doesn't suck up to Trump or cout out of Trump.

An experienced investment banker, right? Oh, my God. The guy has got the most incredible resume. He's, you know, is like head of the Bank of England, head of the Bank of Canada, ex-Goldman, I mean, the guy, Prime Minister of Canada, the guy. the guy is an amazing politician and leader, and he's standing up for his country, and for Trump to pick a fight with Canada is absolutely ridiculous. And another example of Trump going off the rails is if we needed another example. Tariffs are taxes on the American people. This tariff thing is ridiculous.

You know, we might recall that tariffs led us into the Great Depression once upon a time. time. Have we forgotten that? Yes, of course, we've forgotten that. Smooth Holly, my friend. Yeah. So when you think about this, when you look at these things, tariffs, Iran, gas prices, inflation, Wall Street has done well. And I've had Wall Street people say, hey, it's all going up. And I'm like, okay, you're not the American public necessarily. What do you see ahead with, especially with Trump? Two words, Kara, bond market. Bond yields are backing up, you know, despite the great Scott Bessent trying to stick his finger in the dike. Very stupid.

So to speak. Don't try to second guess the bond vigilantes. The bond market is saying something very important here, like deficits matter, debt matters, the Iran War matters, the closing of the Strait of Hormuz matters, gas, oil prices going up matter, your reckless grift matters, your stupid ballroom matters. all these things matter, and you're ignoring, you know, you're blowing up the American economy, you're hastening the time when the dollar is no longer the reserve currency, and you're not doing a damn thing about it. And if you have to refinance parts of this $40 trillion of debt,

you're going to need bond buyers to do that, and they're going to do it, but they're going to require a higher interest rate. And we now spend more on interest expense than we do on their military spending, which is unfathomable at one point. We spend more than a trillion dollars a year now on interest expense. And it's only going to go up higher because interest rates are going to continue to go up. Until what happens? Until, you know, no one rings a bell at the top of the market, Kara, until we lose confidence and we have crisis. And then that's where Wall Street, yeah, because they're all like, it's all good. I'm like, not for today. Okay, sure why not. It's not, and they know it's not all good, but they're not going to say it. They're not going to say it. So every episode,

we get a question from an outside exhibit. Yours is about the insurance company, Athene, which was under Black's Apollo and went public before Apollo bought it back. Hi, I'm a journalist and author, Bethany McLean, and former Vanity Fair colleague of Bills. Hi, Bill. So maybe Sengland isn't the right word, but your book isn't alarmed about Athene either. Mark, Walter, and Guggenheim are obviously in the headlines every day now. Would Apollo Insiders view that model is having crossed a line that Apollo slash Athene don't cross? or is Walter's empire simply accrued or less carefully disclosed version of Apollo's model? Great question.

It is a great question because Bethany is so smart. Explain who Mark Walter is. Mark Walter is, you know, head of various companies in around the Guggenheim Empire that owns the Dodgers, owns insurance companies, did own the Lakers until somehow Jared Kushner's brother got a hold of it with Bob Iger. Don't even ask me how that was possible. I don't understand it. So obviously, Mark Rowan thinks he's built a better mousetrap with Athene.

He thinks he's solved the, you know, longstanding problem on Wall Street of borrowing short and lending long, which is, you know, one of the major reasons we have financial crises. But I do explore at the end of my book, and God bless people if they get there. I think it's an incredible story, Kara,

but you need to get to the end to see the question. questions I raise about this model and whether if these annuadence who are promised five to seven percent interest a year decide they want their money back, it will be like a run on the bank, it will be like Silicon Valley Bank, it will be like, you know, Bear Stearns and Merrill Lynch and Lehman Brothers, and then it'll take down the whole private equity, you know, juggernaut for 10 years. Ten years? Wow. Wow. Look at that. How long it takes to recover from these things.

So it could be the same thing. It's just a more sophisticated. It could be. It could be. Mark, of course, says it isn't, and lots of people say it isn't. And not every one of these models is the same. The good thing is here, they'd have to go through a lot of hoops to get their money out. They can't just go to their ATM machine. I get it.

Still. Still. Runs on the bank or runs on the – they're still the same. Loss of confidence is a loss of confidence. Yes, exactly. So the through line through both the book and some of the other big stories of Wall Street right now, we just talked about a seemingly bottomless. appetite for risk, despite the fact that we're not that far removed from the 2008 financial crisis.

Meanwhile, Americans are getting rocked by higher gas prices, higher grocery prices, tariffs, the high cost of housing and health care, and Wall Street, as I noted, is doing OK. How has the continued success of private credit firms like Leon Blacks, Apollo, and others, reshaped Wall Street's appetite for risk? And what does it ultimately mean for the rest of us? Well, we have an affordability crisis. We have a huge, gap between the rich and poor. None of those things are good. People are up in arms about data centers at the grassroots level, and yet we keep plowing ahead with them and spending more and more capital, and Wall Street has just committed $500 billion to Nvidia so that NVIDIA's

customers can do more data center stuff. You know, Mark Rowan would say we are investing our private capital dollars in senior secure debt. So, you know, If you're worried about senior secure debt, you might as well just jump off a cliff because that means all the equity will be wiped out. All the subordinated debt will be wiped out. All the preferred stock will be wiped out. And all these companies will be going up in flames. And his argument is that's ridiculous. And you know that's ridiculous.

We're senior. We're secured. We're good underwriters. Yes. Well, that's true. But, you know, Silicon Valley Bank invested in Treasury securities. they still went out of business and were liquidated because it was a run on the bank. So loss of confidence is a loss of confidence.

It doesn't really matter sometimes how good your assets are. Because if you can't liquidate them to meet the redemption demand, so what? Yeah. So very, very last question. What story or person do you think deserves more attention? Who are you putting your days on? Ken Griffin. He's the wealthiest guy on Wall Street.

He's even wealthier than Schwartzman. He's spying up all of Florida. Half of Manhattan, he's an art collector, the guy is controlling empires. He hasn't really gotten the treatment. He doles out his interviews to CNBC where they treat him with kid gloves. You know, he's never really explained himself or his businesses. And, you know, he's one of the most powerful people on Wall Street who has not really gotten his full investigation yet. Yeah, that's true.

That's true. Anyway, it's a great book. Liam Black is these characters. characters are really fascinating, and this is a great book. And I really appreciate all your thoughts, Bill. And keep listening, reading him on Puck. He has the best coverage. We argue a lot about things. But I always learn from Bill, which is, I mean, argue in good ways. But I always learn a lot, and I really appreciate all you do. I appreciate you having me on always. Thank you. Today's show was produced by Nishat Corwa, Michelle Alloy, Catherine Millsopp, Madeline LaPlante Duby,

Megan Burney, and Kalin Lynch. Special thanks to Rosemary Ho, Corinne. Ruff and Julia Sharp Levine. Our engineers are Fernando Arruda and Requan, and our theme music is by Trackademics. If you're already following the show, you're keeping it classy. If not, you're falling for that shiny object once again. Go wherever you listen to podcast, search for On with Caroushisher, and hit Follow. Thanks for listening to On With Caroushisher from Podium Media, New York Magazine, the Vox Media Podcast Network, and us.

We'll be back on Thursday with more. Thanks again to Odu for supporting this show. Odo wants to be your ultimate all-in-one fully integrated platform to handle everything. Seriously, everything. Inventory, CRM, accounting, HR, and much more. No more shopping around or settling for expensive services that can only handle a fraction of your business. Thousands of businesses have made the switch, so why not you? Try O-Doo for free at O-D-O-D-O-com.

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