The Prof G Pod with Scott Galloway - State of Banking, Media, and AI — with Andrew Ross Sorkin

Episode Date: May 18, 2023

Andrew Ross Sorkin shares his thoughts on the second-order effects of the banking crisis, recent media events, and AI. We also learn how Andrew is balancing work and time with his family. Follow Andrew on Twitter, @andrewrsorkin.  Scott opens by discussing Vice’s bankruptcy, and what it means for buzzy news sites. Plus, he shares his thoughts on the writers' strike. Algebra of Happiness: just listen.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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cards, savings accounts, mortgage rates, and more. NerdWallet, finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. Episode 250. 250 is the area code serving most of British Columbia, Canada. In 1950, U.S. President Harry S. Truman ordered the development of the hydrogen bomb. We here at Prop G, no joke, have received several emails complaining about how crude I am and saying that my sexual innuendo is totally unnecessary. We, from this point forward, will only talk about serious issues, went into the doctor, complained about my erectile dysfunction, and said, doc, do you know what it's like to play pool with a rope? Sorry, bitches, it's my podcast. Go, go, go!

Welcome to the 250th episode of the Prop G Pod. 250. It's all a blur. Seriously, I don't remember 249 much less like the first one. Actually, I remember the first one, but I don't remember anything in between then. Remember the beginning and the end. In today's episode, we speak with Andrew Ross Sorkin, a columnist for the New York Times and the founder and editor-at-large of Dealbook, an online daily financial report published by the Times. We discuss with Andrew the state of play

across the banking sector and his thoughts on the broader media ecosystem. We also confront Andrew with the truth that he is a Canadian spy. He likes to pretend that he's an American journalist. It's obvious he was born somewhere in Alberta and works for the Canadian Secret Service, the CSS. Anyone that nice, anyone that good looking, anyone who's placed themselves, he's been placed. He is an agent. He's an asset of the Canadian government. I know what's going

on here. I don't know where I got that. I just love, for me, that just like Canadian spy fits Andrew Ross Horkin like a glove. I like Andrew a lot. I think I'm like most people. Andrew is infinitely likable. He's on CNBC. A little bit of backstory about CNBC. They literally hauled my ass down to, what's it, Wall Street every Wednesday for about two or three years. And then one week they said, hey, we don't need you this week. And then the next week they didn't, you know, I said, am I coming in? And I didn't hear back. And basically a close friend of mine who is an anchor for a Comcast-owned affiliate said, your name is on a list of do not book.

I don't know how it got there. But basically I was banned by CNBC. And the most interesting thing is they never called me or said, you pissed off Sheryl Sandberg, or we just think you suck. But literally I just was sort of like on every week and then not on. And they never called me. They never told me and said, hey, this is why you suck. So Comcast, this is what you call really bad form, really like low budget, bad company, bad management form. And you hurt my feelings. That hurt my feelings. Grudges for me are like my plants. I nurture them. I love them. I let them grow. Wait, back to Andrew. Andrew is probably one of the premier journalists

in the world right now because he's trusted. He does the work. He gets up at like 3 a.m., balances out some of the other... Actually, I shouldn't say that, balances out. CNBC does have fantastic anchors. I think they've done a great job of bringing in really talented people. Sarah Eisen, I think Deidre Bulse is really good. I think they do. I love Carl Quintanilla. Is that how you say it? Carl Quintanilla.

He has the best Twitter feed of any business journalist. I like John Ford. He's a nice man. Generally, I really like CNBC, except for the part where they don't like me. That's the part I don't like about CNBC. Anyways, what's happening? Not that I'm bitter.

Daddy's in New York and then I'm off to Miami. This was part of my tour. I did LA, San Diego, then I did Seattle, and then I did Austin, and then I'm in New York, which I love. By the way, nothing in the world matches New York City. If you like cities, and you have to like cities, if you like a crush of humanity, a density of culture, grit, creativity, everything is competing

for number two. Everything is competing for number two. New York is on fire. It is absolutely on fuego. And last night, I took the Prop G team out to the Dumbo house. By the way, if everything I do is totally like douchebaggy and cliche and touristy, trust your instincts. 100%. Total poser. But we sat under the Brooklyn Bridge. It was lovely. It was lovely. Anyways, in New York, and then I'm off to Miami where I'm doing another speaking gig. And then I'm doing this thing called Summit at Sea where I'll be trapped on a boat for three days for the first time in my life, which is either going to be a great experience or an awful experience. So I'm excited about that. But okay, okay, enough about me. Let's talk about the news. There's a lot happening in the media world. Vice

has officially filed for bankruptcy. A group of lenders, which includes Fortress and Soros, have secured a $20 million loan to continue operating Vice and are prepared to acquire the company's assets for $225 million in liabilities listed at $500 million to a billion should no better bid come through. Vice was once valued at about $5.7 billion back in 2017. It also registered investment attention from the likes of big names including Disney, which invested $400 million in the company, but later wrote it off as a loss in 2019. The Wall Street Journal reported that Vice's digital traffic in the U.S. as of March was half of what it was in March 2019 at 20 million monthly unique visitors. I mean, this is just crazy. This is more consolidation, The kind of halcyon days of, you know, winds in our sails,

crazy bull market is over. And, you know, the tide has gone out and these folks are swimming naked. This comes on the heels of BuzzFeed News and MTV News shutting down, as well as layoffs galore across media companies. Our partner, Vox Media, raised $100 million from Penske Media back in February at a $500 million valuation, which is roughly half of what it was worth in 2015, the last time Vox raised money. Forbes was just acquired at an $800 million valuation. Which one of these things is not like the other? So Vox is actually the best of a sorry lot right now at a half a million dollars. Vice News is out of business, or Vice is out of business. I had a show on Vice, which was awful, but they were nice people. For me, it wasn't a surprise

that Vice went out of business. It was a surprise that it took so long. I don't know anybody, anywhere, under any circumstances that touches in any way Vice. So I always thought, how on earth are they making money? And this was sort of evidence or another case of where the narrative got out way ahead of the numbers. And that is the core competence of any CEO right now is the was able to go out and raise money at see above a $6 billion valuation. But the promise, if you will, was well ahead of the performance always. And it kind of occupied this up and coming Gen X, Gen Z, hip, we get it, tattoos, you know, cool brands, new generation media company vibe. But the problem is not that many young people were actually watching it and it wasn't really generating any revenues. I know that's a pretty pedestrian view of what happened there. Also, where was it distributed? I could never find it.

And also just a signal of how desperate they were. They were hiring professors to do shows. But anyways, I think there's more of this to come. It's shocking to most people that it wasn't purchased. They've been trying to sell it for three years. They brought in a very talented executive. I believe she was from Discovery to try and clean it up and sell it. And then when she left, the writing was on the wall that this thing wasn't saleable. Now, literally the dumbest transaction of the last seven days, hands down, maybe of the last quarter, was Forbes was just acquired for $800 million by a young billionaire. I forget. He built some luminary or luminati.

Isn't it luminati? Some sort of underground cult. Anyways, he didn't build an underground cult. He built some tech company, became a billionaire overnight, and has kind of matured or progressed to the midlife crisis stage of a billionaire's life, where they either buy a sports team if they're a Republican or a media company if they're a Democrat. Why? Because they recognize they're not going to live forever, and they freak out, and they want to be iconic. And these things tend to be iconic brands, right? The Washington Commanders is not going anywhere. The name

might go places, but these football teams, the Denver Broncos is going to be around in 50 years. Forbes, if you have money, will be around for a long time. It's a global brand. It's a shitty business. They don't really have a business. They have some traffic. They get some advertisers, but here's the bottom line. Actual news in an era where kind of fake news or parsing other people's news or grabbing headlines from a free source and saying, oh, we'll send traffic to your way and giving people a reasonable facsimile of news via social, via Google for free maybe that's 10% of us who want to read long-form, fact-checked, original journalism, that's just a shitty business. They just don't make money. And typically a billionaire comes in and buys them. And about three years later, whether it's Chris Cox from Facebook or Lorraine Powell Jobs coming in, I think she owns Atlantic, they all come in, a lot of fanfare.

They realize these are shitty businesses. And the newsroom expects them to just keep pouring tens of millions in for their love of journalism. And their financial advisor goes, okay, you're a billionaire now, but you're going to be a millionaire soon if you don't get rid of this thing. And then they try and sell it to the next, to the greater fool. the newspaper here that Jared Kushner bought, I mean, that thing's basically just gone away. These are difficult businesses. Supposedly, Bloomberg Media or the TV side of it loses $100 or $150 million a year, but that has a front-end marketing or strategic component to it and that it helps raise awareness for one of the wealthiest men in the world. I do think there's a civic side to it. I think the mayor is very concerned about media. I think Bloomberg calls balls and strikes. I think they actually do a great job. But also, it raises awareness and helps differentiate their terminal service, which is one of the ultimate cash cows in the history of business if you want to be in the business of trading money and pretending to justify your two and 20. By the way, most studies show that alternative asset managers exactly underperform the S&P by the amount of their fees. That is one of the great head fakes and jazz hands in the world is that hedge fund managers actually should exist. The reality is there's some of them, and we'll talk a lot about those people who do have special insight or just get really fucking lucky. But as an asset class, alternative investments is crypto. It's a giant fucking head fake. Anyways, what's going on here? What's going on here in media? This is

so interesting in my view. So interesting. Essentially, the media landscape is reshaping. It got too much. Everyone talks about the problems with a zero interest rate environment. What about an environment where all these buzzy startups were getting massive inflows of capital, but they never had the businesses that grew into those valuations? That's happening in the media space. Check this out. Check this shit out. Check my shit out. And when I say my shit, I mean data. The streaming network spent $27 billion. That's how much it costs. That's the operating expenses of all the streaming networks. There's about 120 million households in the US. Let's assume a third of them don't stream. They're either far right weirdos that don't want that porn and euphoria in their house or they think that the TV is the devil's tool or whatever. young people, basically anyone under the age of 30, as far as I can tell, doesn't know what television is, doesn't know what broadcast television is. And if they do, it's because

they've stolen or borrowed their parents' Netflix password. You essentially have 80 million streamable households. $27 billion in operating costs, we're talking about, I mean, this just blows my mind. We're talking about $3,500 per streamable household and costs to pipe in euphoria and succession into your house. That is totally, we're not talking about the cable bill. We're not talking about AWS or processing power. We're just talking about the content. The cost of having those zeros and ones of that unbelievable content piped into your house

is $3,500 per household. If you spread it out across all the costs, and there's probably other ways they monet spread it out across all the costs, and there's probably other ways they monetize it internationally and all kinds of things, but still, think about that. There's just no goddamn way that's sustainable. So what have they done? What have they done? They're all cutting costs like crazy. Disney just laid off several thousand people and is cutting $5 billion in costs. It lost $400 million in its streaming division, and that was up, or that was a better number than last.

They lost 4 million subscribers, but they have basically all the streamers have winked and nodded at each other and said, guys, we got drunk here. We're out of control. We need to cut costs like crazy. And by the way, what is the biggest gift, the biggest gift to the streamers right now? Simple. The riders strike, or what I call the whiners strike. These are some of the highest paid riders or the highest paid people with that competence in the world. And everyone's blaming the studios and there's all this virtue signaling around all these stars showing up for 10 minutes and then getting back into their SUVs saying, I stand with riders. Well, good for fucking you. Isn't that precious? What is actually going on here? Who's actually hammering these riders? Who's decided not to pay these riders the $212,000 on average they're used to? The consumer who's getting all the content

they want for 12 bucks a month and it's called Netflix or isn't even paying for it or refuses to watch Jimmy Kimmel or Joey Bag of Donuts at 12 at midnight and get endured and pelted with 12 minutes of ads saying you want a South Korean car, a light beer, or opioid-induced constipation medication. Young people don't want that shit. They're not willing to watch ads for someone to tell okay jokes about the events that day. The consumer has decided to opt out of the ecosystem that supported these writers. And then the other elephant in the room that's the size of a mammoth or a megalodon is two words, first tick and second talk, 1.7 billion people on TikTok. And that's not the most interesting number. 50% of them are creators.

So you got 850 million creators. Let's assume that just 1% of those 850 million creators are really, really good. That's eight and a half million talented people. And what are they making as influencers? Maybe 10 grand a year, maybe 20 grand. I doubt that. So that is what the writers are up against. A plethora, a tsunami of human capital that has washed over the media landscape in the form of eight and a half million talented creators who are willing to get paid near nothing just to see their face on a screen or sell supplements or whatever it is they're trying to sell or get some shitty deal from TikTok, who uses the term partner over and over as Google and Meta did. But at the end of the day, just fuck them. There'll be some very well-publicized examples of an influencer making $2 million a year by selling shit or giving away cars or whatever. That is literally the LeBron of the LeBron. How do you out yourself as someone at a very young age? Has your shit less together than either young people? Say you want to be an influencer. Just, I don't know how I got here. Get off my lawn. Get off my lawn. TikTok is kicking riders in the nuts every day. So you want to get mad at the streamers and the

CEOs? Fine. This is what's going to happen. You're going to wish for the good old days because you are handing a gift, a gift to the streamers. Why? All of these AI experts who made their millions of dollars and when their options stopped vesting, all of a sudden got very concerned with what they were building. Hi, I'm Dr. Frankenstein and I'm worried about Frank. I think he might have some violent tendencies. Well, that's real helpful, doc. What do we do now? I don't know. I just want to let you know I'm concerned. Jesus Christ, if I hear from one more person that's concerned about the shit they built, but they don't know what to do about it. Thanks. That's very, very helpful. Anyways, they've been calling for a pause, right? They want a multilateral pause, which isn't going to happen because North Korea and Russia aren't going to

pause on a development and there's no way to verify or monitor a pause. So that makes no sense. But guess what? Guess what the writers just handed to the streamers, a pause. This is a multilateral enforced agreement to not have to spend any more money on content of which they have enough on their own and have a ceasefire around an army or a war where the bullets are winning. This is a gift to the streamers. The union here has totally overplayed their hand and fucked their members by convincing them they have more leverage in this ecosystem than they actually have. This is going to make Margaret Thatcher's breaking of the backs of the coal miners in Britain in the 80s look like a fucking Easter parade. Rider's strike, whiner's strike.

This is going to get ugly. We'll be right back for our conversation with Andrew Ross Sorkin. Support for this show comes from Constant Contact. We'll be right back for our conversation with Andrew Ross Sorkin. last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter. Luckily, there's Constant Contact. Constant Contact's award-winning marketing platform can help your businesses stand out, stay top of mind, and see big results. Sell more, raise more, and build more genuine relationships with your audience through a suite of digital marketing tools made to fast track your growth. With Constant Contact, you can get email marketing that helps you create and send the perfect email to every customer and create, promote, and manage your events with ease, all in one place. Get all the automation, integration, and reporting tools that get

your marketing running seamlessly. All backed by Constant Contact's expert live customer support. Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories,

and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Welcome back. Here's our conversation with Andrew Ross Sorkin, a columnist for the New York Times and co-anchor of CNBC's Squawk Box. Andrew, how are you? Where are you? I'm great. I'm dialing in from the Upper West Side Bureau. So I'm going to jump around a lot, one, because I have ADD, but two, I'm hoping to catch you or have your guard lower and just get some real honest emotion. I'm going to try to be as honest as possible with you. And I just, I want you to know one thing though. Okay. It's very

important that you know this. Okay. Somebody came up to me the other day and they said, you know, I'm a fellow Canadian. Oh, nice. I'm relaunching your identity. I love it. And I looked at them and I said, for a moment, I didn't understand what they were talking about. That's hilarious. And then I said, oh, you listen to Galloway. Yeah, I love that. And they're like, yeah.

And they're like, you're not a Canadian? I love that. I thought you were Canadian. We were so proud. It could be worse. I could have, I could have recast your identity as something much worse. Anyways, I'm just going to give, I apologize. So, uh, CNN town hall, your thoughts.

CNN town hall, my thoughts. Oh goodness. You know, I'm one generally for an argument to be made that former President Trump is somebody worth interviewing. Obviously, the complicated part about interviewing somebody like that is being able to fact check them, being able to keep them, you know, within the bounds. And that's super hard to do in a live format. So the question I think there's, as a journalist, there's a question to me. I don't think the question is, do you interview him or do you interview anybody? I mean, my view generally is you interview everybody and you interrogate them and you interrogate their ideas.

And that's what journalism is. And if we're not interrogating those people and interrogating those ideas, whether you like those ideas or you dislike those ideas, I don't think we're doing the job. You could argue about the format, meaning the context, the people in the audience, who is in the audience, what does that look like? How does that work? Is it live? Is it taped? If it's taped, could you fact check in a way if it was taped that you couldn't if it's live? So I think that there's probably fair arguments to be made about that. but i do think there were things that came out of that interview that were revealing to me i mean i did learn certain things i was shocked i don't know if you were shocked when he said maybe i shouldn't have been shocked when he

said that he would pardon many of the uh you know, folks that were involved in January 6th. That I thought was a very revealing and telling thing. And by the way, on both sides, I'm sure there are people who support that. And I'm sure there's lots of people who don't support that. But I think knowing that is valuable. What do you think? I think she was given it. I feel sorry for, I don't know, I feel sorry for the right term because she's not a victim.

But Caitlin Collins, I think he's just impossible to interview, especially when you fill the audience with his red pillars. You know who I thought did the best job of handling a similar situation was actually CNBC. When Deirdre Bolsa – I think I'm saying her name correctly. I stumbled across an interview she did with the founder of Opendoor, Keith Rabois, and he started saying things that were just blatantly false. And she would stop him and in a forceful yet dignified way saying, Keith, you can't say that. It's not true. And she managed to do that. She managed to interrupt somebody who was not saying, you know, was spewing falsehoods and yet doing it in a respectful way. And Caitlyn wasn't able to do that. I think he just kind of

rolls over people. They obviously fucked up with the audience, but loosely speaking, I agree with you. He's a Republican front runner. They should bring him on. And the other thing I would argue is it was actually bad for him because the decision is going to be, the presidency is going to be decided by a small group of swing voters in Arizona, Wisconsin, and Georgia. And I got to think, I don't know if you felt this way. I had PTSD watching the thing. I thought, do we really want to go back here? So I think there's no question that, you know, putting him back in prime time is is it just there is a is a question about that do i think that it set him back i don't know i don't know if it set him back i mean i think it probably galvanized um a lot of it may have galvanized a lot of Democrats. And look, if the election were held today and it's a Biden

versus Trump rematch, and that's what it is, there's going to be a large swath of people who are going to come out, I would imagine, against Trump. There are Democrats who would like Trump to run. They think that's actually a positive. They say, look, Biden beat him the first time, he'll beat him again. I don't know if that's the right call or no. So let's switch. Let's get back to sort of your Ballywicker domain. You speak to CEOs every day. You speak to them on camera and off camera. It feels as if a recession has been a month off for about 18 months. Do you have any gut feel when you speak to these business leaders around the real economy and if any projections or feel you have for the economy for the back half of this year? So look, I'm a journalist, therefore I'm probably a professional skeptic, so take that for what it's worth.

And I say that because I do think it's harder to see how things will be better in six months than they are today in the real economy. You could argue that the stock market is always ahead of the real economy, if you think the stock market is efficient and right. So I think it's very possible. And I think most of the CEOs that I speak to when they think about their own business, they think the second half is going to be harder than it is now. And if you look at profit margins today, they're at close to record highs. You know, interestingly, I don't know if you saw Stan Druckenmiller last week and made this comment that he thought it was possible, you know, given where profit margins are,

that you could, you know, stocks may not be higher for 10 years, he said. So I think there's something in there. And, you know, everyone's playing this game of interest rates and, you know and what's inflation really look like. I think once we get through that, whether it's a soft, soft-ish landing, maybe a hard-ish, whatever landing that is,

I'm not even worried about the landing piece. I'm worried about what comes after. Because my great worry has a lot more to do with sort of a sense that you live in some kind of stagflationary period for a long time. I don't know what it is that makes, you know, that turns the economy up. Yeah, it's such a random walk, right? We've been talking about a recession. I thought what Ken Griffin said was really interesting. It may have been on your show. He said that of the $5 trillion stuffed in people's pockets, there's about a trillion dollars left. They're burning

through $100 billion of it, which means in kind of two to four quarters, people are going to start running out of money. Bingo was his name, though. I agree with that. And by the way, most bank, the bank CEOs will tell you by Q4, Q1, that that money runs out even quicker than he would probably say. And yet record low unemployment, you know, retail sales pretty strong. I mean, if you didn't know, if the media wasn't telling us every day that recession is eminent, would you think a recession is coming? It all feels, but at the same time, it feels like we're setting ourselves up for not even a small fall, but a big fall. I've never seen an environment like this where everybody is so sort of perroaring. By the way, maybe that's the call if you think that oftentimes everybody thinks one way and the truth is it turns out the other way. What are your thoughts? We're not Monday morning, but we're Tuesday morning of the banking, the regional banking crisis. What are your observations? What do you think we got right and wrong? What do you think this says about the broader economy? Any thoughts around regional banks moving forward? So I have a view that the banking system in America is now fundamentally broken.

Fundamentally broken. And it's not just about regional banks. It's about the banking system. And to me, the lesson of this past, call it a couple of months, six months, has actually a lot to do with the digitization of finance. signature or even to First Republic. The idea that deposits can literally flee as quickly as they did. Forty two billion dollars walking out the door of Silicon Valley Bank in four hours, to me, changes the entire dynamic. How is a bank bank can you ensure self-insure some other way ensure that the deposits stay at the bank it used to be you have to either call the bank line up to see the teller i mean there's something almost game stoppian about this i actually think that game stop if you remember game stop a year and a half ago two years ago now i know you might think these are totally unrelated but to me they're actually completely tied together. GameStop happens and you see the power and speed, the rapidity with which a group of people, humans, can use digital tools to

fundamentally change the value of companies in ways that are completely unexpected. And I think that, married with where we are now in the banking system, sort of creates chaos in terms of what banking is supposed to be because the idea was always, you put your deposits in. By the way, the deposits could be short-term deposits. You could always walk out with a deposit. But they're always going to be lending at long.

There's always going to be a mismatch. Whether you're, by the way, a big bank or a small, it doesn't matter. That's the point. That's how they make money. But that is, but it's a fundamental, in an era where you can model out how quickly people will take their money and how does that work. In an era where you can do it literally from the phone, think about that. Think about what that means. By the way, you can extrapolate this idea out to all sorts of digital businesses, subscription businesses, SaaS businesses. Think about how quickly, you know, we've tried to make it so easy to onboard people and also so easy to leave. And in fact, the incentive there was if you made it easy for people to leave, that it would force businesses to actually do better by the customer. But there's a flip side to that. And got that email saying, we're pulling, we're telling all our portfolio companies to transfer their money. Here's the person at JP

Morgan. Here's the link to like get it done literally in three minutes. There's no downside to transferring your money to JP Morgan. And so if you think anytime there's insecurity, anyone with more than $250,000 is going to go to one of the biggest banks that is, you know, the title of your book, Too Big to Fail, if regional banks can't survive long-term, which I'm not sure they can, what do you think is the solution? Do we just remove the cap on FDIC insurance? Let's go. So I'll make it more complicated. Let's say we decide that we are going to guarantee all deposits. We explicitly say this, not this implicit situation where you're

not really sure what Janet Yellen's going to do or not do. You say it's hard and fast, it's the law. And then let's say that you are the treasurer or CFO of some company with some amount of money at some smaller bank. And one day it just so happens that you are watching the stock of that said bank crater fall. Even if I told you, Scott, that your deposits were completely insured, I think you may very well save yourself. You know what? Actually, I'm still going to move my money. I'm watching this stock fall. People are very worried about this bank, even if I'm totally guaranteed. Now, maybe they don't all do it in mass. I don't know. Because I've been playing around with lots of different ideas of what kind of guarantee systems could you create? Could you create some kind of FDIC Plus program that guarantees payrolls, for example? Would that be enough

if you raised it to $500,000? Does that do the job? What is it that does the work for you? And I can't get there. I don't that fled these banks was capital in excess of 250 grand. I agree with that. So Charles Schwab, the majority of their accounts, I think they have 300 billion in deposits, but the average deposit is $20,000. And they didn't experience any real flight because people thought it might, in fact, people thought we're safe. But you wrote, you literally wrote the book on this, Too Big to Fail. And all of a sudden, Too Big to Fail is a good thing. Do you think that other than JP Morgan, who are the other winners here? Well, I think right now you'll see, you know, JP Morgan, clearly a winner. I think Bank of America will be a winner though. I think you'd look at some of the whole to maturity stuff that they have. it's larger than you'd want necessarily to be in a perfect world.

I think Wells Fargo is a winner. Citi might turn out to be a winner. You're listing off the biggest banks in America. The biggest banks in America. And then we have to just decide, do you, you know, I'm not Canadian, Scott, but do you want to live in Canada? Do you want to live in Australia? Do you want to live in some of these places? Because that's what it looks like. Now, it's sacrilegious. It's sacrilegious to have this conversation, to say that maybe,

to even raise the issue, would we be better off as a country to have a small number of banks? And the idea of killing community banks is terrible because they actually are working in the community in a way that these other banks are. And then you have to say to yourself, okay, let's say you only have five, six, seven, eight banks. What could you do to incentivize those banks to lend in these markets where, frankly, the profits may not be similar? And they say, I wouldn't want to do this. I know firsthand on the other side of that concentration of why it's bad, and that is I've always started companies. And about 10 years ago, I started doing venture debt, where if a general catalyst or a tier one VC invested, Comerica or SVB would show up and say, if you raise 15 million, we'll give you three or five million on amazing terms in venture debt. And by the way, that was a profitable product for them.

Now you had to bank with them. That has gone away. It's no longer available because these niche banks, I mean, basically when there's a reduction in competition, fees go up on business and retail, I mean, that's leverage and growth. Elizabeth Warren, you know, Senator Warren saying we need to match one-to-one parity. It's like, well, okay, Senator Warren, get ready for a very, very low growth economy. Exactly. I mean, that's the thing that people don't appreciate. I know I don't disagree with you. You know, part of me wonders, here's a very basic, perhaps super simple solution. The Consumer Financial Protection Bureau requires the banks on your app, on your statement, on anything,

that anytime the account, whether it's a business account or something else, or an individual account, is over $250,000, there is like a nicotine label that pops up on your screen that says, warning, this is not insured. And then it's on you. I mean, this goes to this other question about, you know, personal responsibility and whatnot. I know people, by the way, I know people in my family who literally have been, you know, that put money at this bank, they put money in this

bank, they put money in this bank, because people, they grew up with the idea that, you know, they put money at this bank, they put money in this bank, they put money in this bank, because they grew up with the idea that, you know, $250,000 was the limit. Coming up after the break. I would argue to you that one of the reasons that Fox still loved Tucker Carlson, despite the fact that advertisers frankly didn't want to be on his broadcast, was because he served an audience. And those cable carriers around the country cared about that audience keeping their cable bundle together. Stay with us. by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. Hello, I'm Esther Perel, psychotherapist and host

of the podcast, Where Should We Begin?, which delves into the multiple layers of relationships, mostly romantic. But in this special series, I focus on our relationships with our colleagues, business partners, and managers. Listen in as I talk to coworkers facing their own challenges with one another and get the real work done.

Tune into How's Work, a special series from Where Should We Begin, sponsored by Klaviyo. Let me pivot back to media. You're, you know, I won't even say a media star. I'll say a Canadian media star. But you're in the thick of it. You're on the front end. D-list, right? What was that show on Bravo? Was it D-list? Give me a break. But you're in the thick of it. You're on the front end. D-list, right? What was that show on Bravo? Was it D-list? Give me a break. But you're in ad-supported. You're in one of the few places that's making money in ad-supported media. I'm just curious, what do you think of Tucker Carlson going on Twitter? Do you think it's a good idea? Do you think it'll work?

Well, so there's, you just said it's ad-supported. And the truth is within the TV side of my life, it is still, for the most part, a linear cable business. And that's a carriage fee business, much more so than it actually is an advertising. And this is the fees that a cable company pays to CNBC to carry CNBC such that people at home say it's worth my $120 a month. And that's why, by the way, that's true of Fox. That's true of CNN. That's true of MSNBC. The lion's share of the revenue of these cable networks has been a carriage fee business.

The advertising business has been always a smaller minority piece of the pie. In fact, I would argue to you that one of the reasons that Fox still loved Tucker Carlson, despite the fact that advertisers frankly didn't want to be on his broadcast, was because he served an audience. And those cable carriers around the country cared about that audience keeping their cable bundle together and paying their annual or their monthly fee. So the real question to me about, you know, Tucker Carlson going to Twitter is, can he make the economics of that as valuable to him personally and to the system, if you will,

on Twitter? I don't know. I've never known enough about, you know, when you see the number of views on a video on Twitter, it says, you know, a thousand, a million, is that have to be watched for three seconds, one second, five seconds, 20 minutes. It's not that, I mean, it's definitely not 20 minutes. It's clearly not 20 minutes. It's probably closer to the way YouTube does it. So, you know, then the question is, can you make the economics of that work? And will people watch TV, truly watch TV on Twitter? Is that, you know, a sort of that form factor and that medium the way people will do it? And again, I don't know. I watch a lot of the clips just like you do, I imagine. Would you watch a whole show that way? I don't know. So let me, as somebody who gets a lot of offers to do new cool stuff, I see a lot of, you know, stars, whether it's Megyn Kelly or Tucker Carlson, or

I'm trying to think of some more, you know, Andrew Cuomo, they're doing their own thing. They go to, you know, whether it's their choice or not, they go to Substack, they go to Discord, they go to Twitter, they do their podcast, or they, you know, there's all these different venues where they start. People are killing it. Look, Joe Rogan is making that model work for him in a big, big way. I think others may not be, though. Joe started, though. He was organic in podcasting.

He wasn't, you know, I mean, he was successful, but not the icon that he is now. If you were to if you said, okay, Andrew, you, I mean, you're the key, you love big platforms. I think you have mastered. I do like big platforms. I like, I like big platforms that have hopefully both an audience and credibility. And, and that's what I've, you know. Yeah. Yeah. I think you've decided, okay, I may be A-Rod, but I still need the Yankees and, and I still need a stadium and a venue and a coach and all that good stuff. But if you said, if someone said to you, Andrew, you have to go try and forge an income stream and presence and relevance on one of these new platforms, be it Twitter, TikTok, Instagram, doing your own thing, a sub stack.

Can you think of like the one or two that would be most appealing to you if you had to go try and start something on one of these you know with one of the

the new the new co's is that have you ever thought about what you would do so gun to the gun to the head I think the truth is

and I don't know I haven't seen anyone else do it differently I think the most successful ones are doing it on multiple platforms so you know yes Joe Rogan um do it differently. I think the most successful ones are doing it on multiple platforms. So,

you know, yes, Joe Rogan, you know, Call Her Daddy is a huge success on Spotify. And by the way, that's a podcast, increasingly also a television show, right? mean that's that's where it lives so i think you probably start there the real money and advertising and advertising revenue is in in the podcast video space i think less and then i think you then have to leverage the social media component pieces that whether it's twitter whether it's instagram tiktok or the like i don't know uh i mean and then there's the secondary question is, the folks who are making money to me on social are doing it as influencers and effectively, therefore, endorsing product. I think that's a very hard position for, and I think one of the

reasons I actually like doing what I do the way I do it, I think it's a hard position for a journalist to be in the true endorsement influencer space online. But just based on the sort of, at least maybe they're old school ethical guardrails, but I think those guardrails are what we have today. Maybe that's going to change by the way, but that's, I think where we are. So you, you more than dabble in media, you've had a book turned into an HBO film, Too Big to Fail. You're very involved in Billions, you're the co-creator of the series Billions. I'd love to get your take on the writer's strike and how truly complicated one because you have two sides that want things that are totally diametrically at odds, which is you have the writers, I think, fairly want better job protection, especially in an AI world. We haven't talked about chat GPT. I'm shocked that hasn't come up yet. And they also want backend and things that look closer to the old economics of television at a time when TV is moving, obviously, to the streaming side. The other element of this is, given where the streamers are and actually how complicated their business is, you could make the argument that for at least the next three or four months, they actually have no incentive

to negotiate, meaning they're actually going to make money. You know, a dollar saved is a dollar made. And the next couple of months, they're going to save a fortune. I mean, tens of millions, if not hundreds of millions of dollars that are not going to have to go out the door for new production. And because everybody's in the I just don't see this coming to a close anytime soon. Yeah, I think this is going to be reminiscent of how Margaret Thatcher just kept saying no to the British coal miner units and just broke their back. I don't think that sounds well for the riders, but let's switch gears again. Crypt like, give me your top line thoughts on this market, where it's headed, any reflections on what's gone on here?

You know, I've been surprised at how resilient Bitcoin has been. It may very well be the one and only piece of the crypto puzzle that is, you know, truly meaningful. I think Ethereum is a great technology and has some value is it imbued with value i mean i've always thought you know could ethereum work without being you know and also be worth you know a cent one cent yes it could technically um i think there's two versions of crypto we could talk about one is like crypto, and one is like tech crypto. I think there's some interesting tech, I mean, stuff that's sort of being built right now on top of Ethereum and other things. It's kind of interesting. Money crypto, I think, may have had its time. And I think the other piece of this, of what the SEC is doing right now around Coinbase

has made it very, very complicated for any of these exchanges to really be as aggressive as they would want to actually try to invest in money crypto. And just sticking with technology, you brought up AI. What are your thoughts about who are the winners here? And AI, new companies, beneficiaries, existing incumbents, what are your thoughts? Okay, so I do think it's transformative. And I'm squarely in the camp of Bill Gates, who will tell you a story of how he saw a demo in the 1980s for a graphical interface. And it wasn't until last fall when he saw a demo for ChatGPT that he could say he'd seen anything comparable, meaning game-changing in the business. I think it is that big and will have massive effects on

labor, on the way we live. I can't even... Both good and bad. Microsoft will obviously be a winner of sorts, though I think it's very possible that Bard and Google, I don't know if they're going to fully catch up, but I think given just the scale that they have already, they can play in that game. There's really only two other major large language models that I think people are really focused on. One is Anthropic, and the other is Inflection. This is the firm that was started in part by Reid Hoffman. Within the sort of engineering space, those are sort of the four major players.

Then there's Scale AI and others, but they're sort of working on things to help the other players. So to me, the big question is, what does AWS and Amazon ultimately do? I think they probably have to partner or create or own one of those businesses. And similarly, where does Apple land? And I don't know where you put also a meta in that.

By the way, I think, you know, Lena Kahn, who I interviewed last week, she's right. This will benefit the incumbents because it requires infrastructure. It requires big dollar infrastructure. It requires chips, lots of NVIDIA chips and others to make this whole thing work. And by the way, those guys are going to be the ones who are regulated first. But I wouldn't worry about them, really. Folks, I'm worried about, both worried about and where the opportunity may lie, is there's so many sort of smaller open source projects that are being worked on right now.

And the question is whether any of those projects can actually, you know, reach escape velocity. And that part I don't know. Can you think of any, when you speak to, what sectors do you think are most likely? I mean, Chegg announces, kind of just acknowledges that Chat chat GPT is cutting into the business and the stock gets taken down 40%. Can you think of any sectors that you think are sort of on the kill list or are threatening to sue over chat GPT and the idea of large language models, because he is desperately worried that the content providers are going to have a really tough time. I think there's going to be great value, actually, for a company like the New York Times or CNBC or NBC in the context of breaking news. I think the true value in the content play will be

about news that's breaking if you can break the news that will have enormous value to people but i'm not sure the archive and i'm not even talking about the archive 100 years ago i'm talking about the archive like you know 24 hours ago or possibly even 10 minutes ago will have value because once the story is broken, the AI will be able to write the same story, if not better by layering other things. So I worry deeply about content companies. And I also, I mean, you talk about TV or movies, you know, think about a TV show. A TV show might have a writer's room of, you know, a showrunner. Maybe there's a deputy. Maybe there's a handful, five or six other writers and a writer's room assistant. You know, is it possible one day that two or three of those spots

will be just replaced by AI? You know, that's what scares me. So I know your time is limited here. You've been very generous. One last question. I just love to know, you know, I know you, I know you, I don't know you well, but I know you well enough to know that you're a very thoughtful guy, a family man. Coming out of COVID, post-COVID, if and how has it changed your view to what you want to accomplish? Not as much to work, but with respect to your family and your relationships and just your general thoughts about how you want to live your life. Oh, you're going to get me on the couch here because this is like the issue that I spent probably too much time thinking about. Maybe not enough time doing what I think I should be doing about.

In a way, COVID, you're not really allowed to say this out loud. It was an element that COVID was a blessing in that I really spent time with my family in a way that I hadn't in a very long time. And it was a gift. It was revelatory. It was so many things and there's part of me that almost yearns for for for some of that I've tried to rearrange my life and schedule to be a bit more like that though obviously we're now i'm traveling like constantly again and uh working at all hours again and you know meeting people in person again i wish i could i but i am trying to say no more than i used to i think that's actually been the biggest the biggest lesson you can say no and that's okay and and but i also don't know if that's a a period in a career

meaning you know in my 20s you never wanted to say no because everything was an opportunity. Everything was an opportunity. And so where is the moment where you feel more comfortable saying no and maybe being okay with and accepting professionally that whatever that opportunity is, you may lose it but on the other side that you're gaining that opportunity to spend time with in my case i have two sons and a daughter and a wife and and and what that opportunity how blessed that opportunity can be so i will say this i was just at a memorial service uh for someone who passed away and uh her husband was speaking they had been together for 55 years and it was the big takeaway for for me he said you know when you're with somebody for a really long time and you have a family one of the things you do is you say to the other person say remember when remember when we did this remember we did that remember when we had this argument remember when the kid did the kids did this yeah there's a lot of that he said i don't have that anymore because she's not here. And I thought it was such a,

I say to my wife a lot, remember when, remember we did this? And we've been together for 17 years, married 20 years since we started dating. And that's a long time. And so there's a lot, we have that. But I want to be able to have those memories with her and with my kids. And, you know, every moment that I'm working, I'm probably not having that. But at the same time, I've also tried to incorporate that into my work. And we're all trying. We're all trying. Probably not doing as well as we should.

Andrew Ross Sorkin is a columnist for the New York Times and the founder and editor-at-large of Dealbook, an online daily financial report published by the New York Times. He started in 2001. Andrew is also co-anchor of CNBC's Squawk Box and the author of Too Big to Fail, How Wall Street and Washington Fought to Save the Financial System and Themselves. He joins us from his home in Manhattan.

Andrew, it's always a pleasure. Best to you. It's always a pleasure. I don't know if I'm allowed to extend the show. I just want to say to you that I listen to you as much for your insights into business and tech and all that good stuff. But the stuff that I often just think about and ruminate and think is so valuable is your conversations about family and about what's important. And it's really so meaningful. And I think you do such an extraordinary job.

So I just want to thank you on behalf of the Sorkin family. I appreciate it. That means a lot coming from you, and especially Pilar. Thanks, brother. Thanks. Algebra of happiness, listening. Listening is a superpower, and it's something that I didn't embrace, and I don't think a lot of people, especially men or especially people who like to think of themselves as leaders are important. They have a tough time listening. Why? Because they're put in situations where a lot of their success has been a function of their ability to communicate and assess the situation and sort of weigh in and hopefully have the best view because, you know, they're the leader. And that leads to you not being a great listener. And a lot of great leaders or a lot of CEOs, my observation has been they're especially good at listening. They ask questions and they listen and they might weigh in. But a young CEO oftentimes feels the need to, you know, use everyone else's statements as a prompt for them to give their view

and their opinion. Where this really pays off is at home and recognizing that sometimes when your partner is upset or saying something, it's not your job to kind of weigh in and counteract it. I do this. I used to do this with my kids. Everything they'd say, I'd say, well, this is what happened or this is what you should be thinking. And sometimes all they want is just for you to listen. And it's not about correcting them. It's not about arguing with them. It's just about kind of listening. Also, I think listening is a power move. I, for the first time, recognized when I got older, the power of silence or not responding. And that is someone would say something and I would just reflect on it and just look at them. I think it reflects confidence just to be comfortable in silence

and or not respond and just nod your head and listen or ask another question and let them do the talking. And I'm not suggesting that you don't engage, but there is something around engaged silence. It's called listening. So a gangster confidence move, a sign of empathy, a sign of investing in your partnership. Very simple. Active listening. Just engage. Be silent, but engaged. This episode was produced by Caroline Shager and Jennifer Sanchez is our associate producer

and Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly markets show. What did we think of our algebra of happiness on listening? I'm sorry, what'd you say? What software do you use at work? The answer to that question is probably more complicated than you want it to be. The average U.S. company deploys more than 100 apps,

and ideas about the work we do can be radically changed by the tools we use to do it. So what is enterprise software anyway? What is productivity software? How will AI affect both? And how are these tools changing the way we use our computers to make stuff, communicate, and plan for the future?

In this three-part special series, Decoder is surveying the IT landscape presented by AWS. Check it out wherever you get your podcasts. Support for this podcast comes from Klaviyo. You know that feeling when your favorite brand really gets you? Deliver that feeling to your customers every time. Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond. Make every moment count with Klaviyo.

Learn more at klaviyo.com slash BFCM.