State of Banking, Media, and AI — with Andrew Ross Sorkin

Support for this podcast comes from Slack. You have to get your work done. But what if you and your team could do it better? Slack is a productivity platform that connects all your team members together instantly. It's built to help your team with a host of features, like huddles for quick check-ins, and clips for recording and sharing video. Slack also makes it easy to search and find the right information you need. You can even integrate the apps you use in your normal workflow, like your calendar or product management tools. So you stay focused on the work that matters and get more done. Learn more at slack.com slash productivity. Episode 250. 250 is the area code serving most of British Columbia, Canada. In 1950, US 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 when into the doctor complained about the virus. 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 its 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 Sorkin 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 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 up Shel 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 accessions 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 Ditro Bols is really good. I think they do. I love Carl Quintnea. He says, that is it. Carl Quintnea. 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 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 out 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, enough about me. Let's talk about the news. ♪♪ There's a lot happening in the media world. Vice is 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 the vice's digital traffic in the US 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 wins in our sales, crazy bull market is over. And 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 to half a billion dollars. Vice News is out of business or vices out of business. I had a show on vise, which was awful. There were nice people. I still, for me, it wasn't a surprise that vise 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, vise. So I always thought, how on earth are they making money? And this was sort of evidence or in other 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 ability to tell a story and raise money at a, or raise cheaper capital than the next person. And the founder here, I think his name is Shane Smith, was incredibly charismatic, spun an unbelievable story and 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, cool brands, new generation media company vibe. But the problem is not that many young people are 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, this is, I think there's more of this to come. This is sort of, 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, that was kind of 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, this is an Illuminati, some sort of underground cult. Anyways, he didn't build an underground cult. He built some tech company. He became a billionaire overnight. He's 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 I 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 fact, similarly, of news via social, via Google for free. That's a great value for the consumer and the discerning consumer of which 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 in about three years later, whether it's Chris Cox from Facebook or Lorraine Powell Jobs coming in. I think she owns the 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. Remember the observer, the newspaper here, the Jared Kushner bot? 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 $2.20. 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 in 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 influence 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 in euphoria in their house, or they think that the TV is the devil's tool or whatever. Or you have the hard left people who are like, oh, I only want to see Atlantic, right? Don't watch TV. Or it's 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. You essentially have 80 million streamable households. $27 billion in operating costs. We're talking about, I mean, this just blows my mind that we're talking about $3,500 per streamable household and costs to pipe in euphoria and succession into your house. That is total. 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 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 it's cutting five billion costs. It lost $400 million in its streaming division, and that was up. That was a better number than last. They lost 4 million subscribers, but they have basically all the streamers have winked and nodded 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 winers strike. These are some of the highest paid riders or the highest paid people with that confidence 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 a month and it's called Netflix, or isn't even paying for it, refuses to watch Jimmy Kimmel or Joey Bagadonuts at midnight and get endured and pelted with 12 minutes of ad 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 riders 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 8.5 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, that is what the riders are up against. A plethora, a tsunami of human capital that is washed over the media landscape in the form of 8.5 million talented creators who are willing to keep 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 a term partner over and over as Google and metadata. But at the end of the day just fuck them. They'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, 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 CEO's 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 besting 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 you might have some violent tendencies. Well, that's a 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. They want a multilateral pause, which isn't going to happen because North Korea and Russia aren't going to pause on AI development. There's no way to verify or monitor a pause. So that makes no sense. But guess what? The writers just handed to the streamers a pause. This is a multilateral and forced 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. Riders strike, miners strike. This is going to get ugly. We'll be right back to our conversation with Andrew Ross Sorkin. Support for Prop T comes from Polestar. Designing an SUV for the electric age means redesigning what an SUV can be. Introducing the 100% electric Polestar 3. Designed to go farther with up to 300 miles of range and designed to accelerate from 0 to 60 in 4.6 seconds. The Polestar 3 is built to protect with advanced safety systems and light our technology that ensure the car is always aware of its surroundings and with its unmistakable styling. In 25 speaker, Bowers & Wilkins audio system with built-in headrest speakers, the Polestar 3 has the look and sound of nothing else on the road. Polestar 3, the SUV for the electric age. Visit Polestar.com to learn more and design yours today. Twitter was once a Global Town Square, a place where people broke news, shared real-time footage that countered autocratic narratives, and mobilized. Now thanks to Elon, it's just a 24-7 toxic circus of bad clowns. I'm name Araza and that's Cara Swisher and we make the podcast on with Cara Swisher. This week we've got a great episode on the latest self-destructive things that Elon has done and how he's swinging his power around in all the wrong places. From helping censor Twitter and Turkey on the eve of an election to the happy home he's building for Tucker Carlson. And don't forget all his recent sub-tweeting of racist memes. That was nice too. Today we break down the madness of King Elon, how his power has changed the power of Twitter and why it matters, with two of the best beat reporters in the biz. Zoe Schiffer, managing editor at Platformer, who has all the receipts, and Ryan Mack, a tech and accountability reporter from The New York Times. It's a great conversation and it's live now. Search for on with Cara Swisher wherever you get your podcasts. Welcome back. Here's our conversation with Andrew Ossoarken, 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. I want you to do one thing though. It's very important that you notice somebody came up to me the other day and they said, you know, I'm a fellow Canadian. Oh, my God. I'm relaunching your identity. I love it. I looked at them and I said, for a moment, I didn't understand what they were talking about. And then I said, you listen to Galloway. They're like, yeah, they're like, you're not a Canadian. I thought you were Canadian. We were so proud. It could be worse. I could have recast your identity as something much worse. Anyways, I'm just going to give. I apologize. So CNN Town Hall, your thoughts. Yeah. CNN Town Hall, my thoughts. Oh, goodness. You know, I'm one generally for transparency and for, you know, interviewing people of import, like, and people of significance and of consequence. And, you know, for better or worse, depending on your political view. You know, I think there's probably an argument to made that the former president Trump is somebody worth interviewing. Obviously, the complicated part about it 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 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, you dislike those ideas, I don't think we're doing the job. You could argue about the format, meaning the context, you know, the people in the audience, who is in the audience? What does that look like? How does that work? Is it on? Is it live? Is it taped? If it's taped, could you fact check in a way of was tape that you couldn't have its lives? So I think that there's probably fair, 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 have your shots. When he said, maybe I shouldn't have been shocked when he said that he would pardon many of the, you know, folks that were involved in January 6. 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'm not, I feel sorry for the right term, just not a victim. But Caitlyn 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 Open Door, Keith Rebois. And he started saying things that were just blatantly false. And she would stop him and in a forcefully at dignified ways. And Keith, you can't say that. It's not true. And she managed to do that. She managed to interrupt somebody and who was not saying, you know, was spewing falsehoods and yet doing it 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. I think there'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 this 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 just there 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 a lot of, it may have galvanized a lot of Democrats if he become, and look, if it's if the election were held today and it's a, Biden versus Trump, you know, rematch. And that's what it is. You know, 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 they think that's actually a positive. They say, 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, 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 professional, I'm a journalist therefore I'm probably a professional skeptic. So take that for what it's worth. And, 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. It is, 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, the, 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, 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, my great worry is, has a lot more to do with sort of a sense that you live in some kind of stagflationary period for, you know, a long time. I don't, I don't know what it is that makes, you know, the turns the economy up. Yeah, it's just, 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 five trillion stuffed in people's pockets, there's about a trillion dollars left. They're burning through a hundred billion of it, which means in kind of two to four quarters, people are going to start running out of money. Bingo is his name. Oh, I agree with that. And by the way, most bank, the bank CEOs will tell you by two, four, two, one, 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 imminent, 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 perplexed. There really isn't a consensus around what is going to happen. What? I'm curious. Do you know anybody who is saying to the moon anymore? I don't know anybody who's calling for an economy that's, you know, rip roaring. By the way, maybe that's the call if you think that oftentimes, you know, 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? Where do you, you know, 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. And I think that when you really look at what happened to Silicon Valley Bank or 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, it changes the entire dynamic. How is a 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 stopping about this. I actually think that game stop. If you remember game stop a year and a half ago, two years ago now, and anyway, I think this are totally unrelated. But to me, they're actually completely tied together. Game stop 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 depositors could be short-term deposits. You could always walk out with the deposit. But they're always going to be lending it long. There's always going to be a mismatch. Whether you're, by the way, a big bank or a small bank, it doesn't matter. That's the point. That's how they make money. But that is. But it's a fundamental 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. Oh, you could 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, it would force businesses to actually do better by the customer. But there's a flip side to that. And in the banking business in particular, it's a dangerous one. Yeah, there's externalities around a frictionless economy. So if you believe in the numbers of striking, the story I talk about, you get an email from your venture capitalist. I got that email saying we're pulling, we're telling all our portfolio companies to transfer their money. Here's the person at JPMorgan. Here's the link to get it done literally in three minutes. There's no downside to transferring your money to JPMorgan. And so if you think anytime there's insecurity, any 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 FDS insurance? But it's got 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 Johnny Allen's going to do or not do. You say it's a hard and fast. It's a law. And then let's say that you are the treasurer or CFO of some company with some amount of money at some, 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 a mess. I don't know. But I've been, because I've been playing all around with lots of different ideas of what kind of guaranteed systems could you create. Could you create some kind of FDIC plus program that guarantees payrolls, for example, with that, you know, be enough if you raised it to $500,000. Does that do the job? You know, what is it that does the work for you? And I can't get there. I don't know what the fail say version of this is. The only counter to your argument around even if the stock, even if you remove the cap, it wouldn't make any difference is that my understanding is the majority of the money that fled these banks was capital in excess of $250,000. That's true with that. So Charles Schwab, the majority of their accounts, I think, you know, 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 it were safe, but 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 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. City might turn out to be a winner. You're listening off to 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, even raised 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. You know, what could you do to incentivize those banks to lend in these markets where frankly the profits may not be similar? And they say, eh, I don'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 in about 10 years ago, I started doing venture debt, where if a general catalyst or a tier one VC invested, Comerica or SBB 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 banking consumers. So it's the tension between the excess, you know, the systemic risk. But couldn't you make an argument that a small number of ring fenced bank failures is a sign of a healthy economy? Because what people don't appreciate is that a bank that loans out 500 bucks on a hundred bucks in deposits. I mean, that's leverage and growth. Elizabeth Warren, you know, Senator Warren's saying we need to match one to one parody. It's like, well, okay, Senator Warren, get ready for a very, very low growth economy. Isn't it? 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 any time they 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 went on. I know people, by the way, I know people in my family who literally have been, you know, put money here at this bank. They put money in this bank. They put money in this bank because because of people, 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. 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. Dealist, right? What was the show on Bravo? Was it? Dealist? Give me a break. But you're an 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 this is a good idea? Do you think it'll work? Well, so there's, you know, you just said it's ad supported. And the truth is within the TV side of my life, it is still a, for the most part, a linear cable business. And that's a carriage fee business as much as, I mean, much more so than it actually is an advertising. And this is just a, 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 was, 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, 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 he 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 in 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 Meghan Calla 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 a sub stack, 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. And people are killing, look, Joe Rogan is making that, 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 master. I do like big platforms. I like big platforms that have, hopefully, both an audience and credibility. And that's what I've, oh, you know. Yeah. Yeah. I think you've decided, okay. I'm maybe Arah, but I still need the Yankees. And, and I still need a stadium and a venue and a coach and all that, 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 new, the new Coase, have you ever thought about what we do? So gone to the, gone to the head. I think the truth is, and I don't know if 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, you know, call our daddy's a huge success on, on Spotify. And by the way, that's a podcast increasingly also a, technically a television show, right? I mean, that's, that's where it lives. So, I think you'd probably start there. The real money, an average, an advertising revenue is in the podcast video space. I think less, and then I think you'd then have to leverage the social media component pieces, whether it's Twitter, whether it's Instagram, TikTok, or the like, I don't know. I mean, and then there's the secondary question is, the folks are making money to me on social are doing it as influencers and effectively therefore endorsing products. 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 journalists to be in the true endorsement influencer space online. But just based on the sort of, at least maybe their 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, you know, a book turned into, you know, an HBO film, Too Big to Fail. You're very involved in Billions or the co-creator, the series Billions. I'd love to get your take on the writer strike and how do you think that plays out and the dynamics behind it? You know, I think the writer strike is a truly complicated one because you have two sides that one things that are totally diametrically at odds, which is you have the writers, I think fairly, and, you know, want better job protection, especially in the AI world. We haven't talked about chat GPT. I haven't, I've shocked that hasn't come up yet. And they also want back end and, and, and things that looked 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 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 same boat, you know, it's the, the, the, the, it's a gift and the field is flat. It's not like one, but he's, you know, one, one firm is advantaged over the other. You could argue Netflix might be marginally advantaged just because of the amount of throughput and production. They had stuff going prior, but 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. Crypto. What are 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. I think there's two versions of crypto that we could talk about. One is like money crypto and one is like tech crypto. I think there's some interesting tech credit. 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, is 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 any AI, new companies, beneficiaries existing incumbents, what are your thoughts? Okay, so I do think it's transformative. And I'm, you know, I'm squarely in the camp of Bill Gates, who, you know, will tell you a story of how he saw a demo in the 1980s for a graphical interface. And it was until last fall when he saw a demo for chat GPT that he could say he'd seen anything comparable, meaning game changing in the business. I think it is that, that big and we'll have massive effects on labor on the way we live. It just, 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 the, those are sort of the four major players, then there's, you know, scale AI and others, but they're sort of working on things to help the other players. So the, to me, the big question is, you know, what does AWS and Amazon ultimately do? I think they probably have to partner or create or own one of these, 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 nivi 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 would even worry about them really. Folks, I'm worried about, but both worried about and where the opportunity may lie is there's so many sort of smaller, you know, 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, a check announces kind of just acknowledges that chat GPT is cutting into the business and the stock. It's taken down 40%. Can you think of any sectors that you think are sort of on the kill list or going to have the toughest time responding to the threats of AI? Well, the truth is, and I think Barry Diller was right when he said that, you know, he's been 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. Think of, I mean, 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 the content companies. And I also, I mean, you talk about TV or movies. You know, think about TV show TV show might have a writers room of, you know, a show runner, maybe there's a deputy. Maybe there's a handful five or six other writers and a writers room assistant. You know, is it possible one day that there were 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 your family and your relationships and you just your generally thoughts about how you want to live your life. You were you were 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. I'm a bit more like that. Though obviously we're now I'm traveling constantly again and working all hours again and you know, meeting people in person again. I wish I could 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 period in a career, meaning, you know, my 20s. You never wanted to say no because everything was an opportunity. And so when it where is the moment where you feel more comfortable saying no and maybe being being okay with an accepting professionally that that whatever that opportunity is you may lose it. But on the other side that you're gaining that opportunity to spend time with my case, I have two sons and a daughter and a wife and and what that opportunity help less that opportunity can be. So I will say this. I was just at a memorial service for someone who passed away and her husband was speaking. They've been together for 55 years and it was the big takeaway 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. You remember when remember when we did this, when we did that, remember when we had this argument remember when the kids did this to you. 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 we did this and we've been together for. 17 years, Mary 20 years since we started dating and that's a long time. 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, you know, we, I've also tried to incorporate them to 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 Deal Book and 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 joined us from his home in Manhattan. And man, hadn't Andrew, it's always a pleasure. Best to you. It's always a pleasure. I don't know if I'll understand this 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 that. That means a lot coming from you and especially Pilar. Thanks, brother. Thanks. How's your 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 or important. They have a tough time listening. Why? Because they're putting 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 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. Ask questions and they listen. And they might weigh in. But a young CEO oftentimes feels the need to 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 said, 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 at them. It's just about kind of listening. Also, I think listening is a power move. I, for the first time, recognize when I got older, the power of silence are not responding. And that if 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 Burroughs is our technical director. Thank you for listening to the PropG 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 did you say? Hahaha! Ugh!